Carine purchased a piece of land with her inheritance. She was planning to open a mini-golf course and put in a zip-line course. Carine had been laid off for a year and could not find work as a golf pro. After spending some time researching mini-golf and zip line course designs, she received a job offer which she decided to take. She has received an offer to purchase the land at a significant gain. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Since Carine's primary intent was to use the land in her business, the gain is considered as capital gain. This is because the land was held as a capital asset with the intention of using it in the business. Additionally, the property taxes on the land may be deductible if Carine elected to capitalize the costs of the land during the period it was held for business use. However, this does not affect the characterization of the gain as a capital gain.

Carine Purchased a Piece of Land with Her Inheritance