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contract price |
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Contract Price In common law, the amount of money one receives in exchange for providing a good or service outlined in a contract. The contract price must be stated in the contract. For example, if two parties make a contract to sell a house for $100,000, the contract price is $100,000. contract price A tax term used in the calculation of gain realized on an installment sale. It is the selling price, minus any mortgage debt assumed by the buyer, plus the excess of any such liens collected in addition to the seller's equity in the property. Contract Price With respect to an installment sale, one of the amounts used to compute the percentage of each principal payment that is taxable as gain. The contract is equal to the gross selling price when no mortgages are assumed. If a mortgage is assumed, the contract price is the gross selling price minus the amount of the mortgage plus the excess (if any) of the mortgage over the seller's basis and expenses of sale. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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