Rafael sold an asset to Jamal. What is Rafael's amount realized on the sale in each of the following alternative scenarios?

A. Rafael receives $80,000 of cash and a vehicle worth $10,000. Rafael also pays $5,000 in selling expense.

B. Rafael received $80,000 of cash and was relieved of a $30,000 mortgage on the asset he sold to Jamal. Rafael also paid a commission of $5,000 on the transaction.

C. Rafael received $20,000 of cash, a parcel land worth $50,000, and marketable securities of $10,000. Rafael also paid a commission of $8,000 on the transaction.

First scenario amount realized is $85,000

Second scenario amount realized is $105,000

Third scenario amount realized is $72,000

Explanation:

first scenario:

Cash proceeds $80,000

vehicle worth $10,000

selling expense ($5,000)

Amount realized $85,000

second scenario:

Cash proceeds $80,000

mortgage relief $30,000

selling commission ($5,000)

Amount realized $105,000

Third scenario:

Cash proceeds $20,000

land worth $50,000

Marketable securities $10,000

selling commission ($8,000)

Amount realized $72,000

The second option is the most beneficial as the benefits of $105,000 is more than the amount realized on other options