Albert purchased a tract of land for $140,000 in 2016 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000.Highway engineers surveyed the property and indicated that he would probably get $180,000.The highway project was abandoned in 2019 and the value of the land fell to $100,000.What is the amount of loss Albert can claim in 2019?
A)$40,000
B)$60,000
C)$80,000
D)$100,000
E)None of these.

Question

Quizplus · Accepted Answer

Albert's loss is calculated based on the actual cost basis of the property, not on its potential value or the expected sale price after improvements like a highway construction. Since he purchased the land for $140,000 and its value fell to $100,000, the actual realized loss is $40,000. However, the question asks for the amount of loss he can claim in 2019. Without specific details on tax laws or insurance claims that might allow for a different calculation, the question doesn't provide enough information to determine what amount he can claim. Therefore, the correct answer is "None of these" because the provided options do not accurately reflect the situation based on the information given.

Albert Purchased a Tract of Land for $140,000 in 2016