Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 5

Herbert, a collector of rare coins, bought a 1916 Spanish Bowlero for $2,000 in 1984. He sold the coin for $4,500 in January. Herbert retired from his loading dock job in June and began actively buying and selling rare coins. By December, Herbert's realized gain from such activities was $21,500. What type of taxable income was January's $2,500 gain