Charlotte sold her unincorporated business for $600,000 in 2017 . The sales contract allocated $120,000 to equipment, $300,000 to land, and $180,000 to goodwill. Charlotte had a $0 basis in the goodwill, the land cost $150,000, and the equipment originally cost $250,000 but it was fully depreciated. What is the amount of the gain eligible for installment sales treatment?

a. $0
b. $330,000
c. $450,000
d. $600,000
e. None of the above

b
RATIONALE: The $120,000 gain on the equipment is all § 1245 depreciation recapture and, therefore, is ineligible for the installment method. The gain on the land of $150,000 and the $180,000 gain from the sale of the goodwill are eligible for the installment method. Therefore, the amount of gain eligible for installment sales treatment is $330,000 ($150,000 + $180,000).