Floyd, a cash basis taxpayer, sold land in which he had a basis of $10,000, for $100,000 cash. He received $25,000 on January 1 of the year of the...
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Floyd, a cash basis taxpayer, sold land in which he had a basis of $10,000, for $100,000 cash. He received

$25,000 on January 1 of the year of the sale. On December 31 of the year after the sale he received a payment of $75,000 plus interest on that amount at 8% per year. How much after-tax cash will Floyd have in the first year if the property was a capital asset and his MTR on ordinary income was 10%?

A. $22,500.

B. $25,000

C. $79,980.

D. $102,480

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Cash Received in first year $25,000 Less:... View the full answer

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