Steve Drake sells a rental house on January 1, 2013, and receives $130,000 cash and a note for $55,000 at…

Steve Drake sells a rental house on January 1, 2013, and receives $130,000 cash and a note for $55,000 at 10 percent interest. The purchaser also assumes the mortgage on the property of $45,000. Steve’s adjusted basis in the house on the date of sale is $152,500, and he collects only the $130,000 down payment in the year of sale.