Sol purchased land as an investment on January 12, 2016 for $85,000. On January 31, 2019 Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

Question

Sol purchased land as an investment on January 12, 2016 for $85,000. On January 31, 2019 Sol sold the land for $90,000 cash. What is the nature of the gain or loss? ​

Quizplus · Accepted Answer

The asset was held for more than one year (from January 12, 2016 to January 31, 2019), so it qualifies as a long-term capital asset. Since Sol sold the land for a higher price than he bought it for, he has a long-term capital gain.

Sol Purchased Land as an Investment on January 12, 2016