If Section 1231 applies to the sale or exchange of an unharvested crop sold with land,the costs of producing the crop are
A)capitalized.
B)deducted as an expense of operations when incurred and also deducted from the sales price at the time of the sale.
C)deducted when incurred if the land is sold but capitalized if the land is exchanged.
D)deducted as an expense of operations when incurred.

Question

Quizplus · Accepted Answer

Under Section 1231, the costs of producing an unharvested crop sold with land are capitalized, meaning they are added to the basis of the property and not deducted as an expense when incurred.

If Section 1231 Applies to the Sale or Exchange of an Unharvested