On July 1, 2018, DJ sold equipment used in her business and reported the gain using the installment method. Her adjusted basis in the equipment was $150,000. The equipment was subject to $30,000 of depreciation recapture. DJ sold the property for $250,000, with $100,000 due on the date of the sale and $150,000 (plus interest at the Federal rate) due on August 1, 2019. What is the amount of gain recognized in 2018?
Fill in the blank(s) with the appropriate word(s).
$58,000
$58,000 recognized gain. The gross profit is $70,000 or 28% ($250,000 ? $150,000 basis ? $30,000 recapture). The gain recognized is 28% of the cash received ($28,000) plus the $30,000 recapture.
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