Choice "A" is correct. Unless the taxpayer elects not to use the installment sales method, the taxpayer generally will recognize gain (but not loss) over the period during which the taxpayer receives cash payments (other than interest income) from the sale of noninventory assets. Note that this method is not available for the sale of stocks and securities traded on an established securities market.The gross profit will be the amount realized less selling costs less the adjusted basis of the property sold (note: IRS forms require the taxpayer (i) to increase the adjusted basis by the amount of the selling costs and (ii) not reduce the amount realized by the selling costs. This requirement does not change the amount of gain/gross profit.If the contract requires that payments be made in a subsequent year and if the contract requires little or no interest, the taxpayer may have to reduce the amount realized by the amount of unstated interest. This rule does not apply here because the contract requires that the buyer pay accrued interest at the prime rate in the next year.Amount realized:

Choices "c", "b", and "d" are incorrect per the above rule and per the above computations.