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Gross Profit Percentage from Property Sale & Mortgage

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Kevin sold property with an adjusted basis of $58,000. The buyer assumed Kevin's existing mortgage of $40,000 and agreed to pay an additional $60,000 consisting of a cash down payment of $40,000, and payments of $4,000, plus interest, per year for the next 5 years. Kevin paid selling expenses totaling $2,000. What is Kevin's gross profit percentage?

A. 33.33%
B. 40%
C. 60%
D. 66.67%

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Solution Summary

This solution provides the correct answer, explanation, and all calculations to show the gross profit percentage for Kevin, based on the property sale scenario listed.

Solution Preview

40,000 + 60,000 = 100,000

100,000 - 58,000 - 2,000 = 40,000

40,000 / 60,000 = ...

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