Suppose a taxpayer owns an apartment complex. Under U.S. tax law, in what category would this property be classified?

Question

Quizplus · Accepted Answer

According to U.S tax law, property used in trade or business (such as an apartment complex) is considered a separate category for tax purposes. This means that income and expenses related to the property would be reported on the taxpayer's tax return as business income or expenses. Option A (Personal residence) is incorrect because it refers to property that is primarily used as a personal residence, not as a business property. Option B (Dealer property) is incorrect because it refers to property held by a dealer (such as an auto dealer) for the purpose of resale. Option D (Investment property) is incorrect because it generally refers to property that is held for the purpose of generating income, but not necessarily as part of a trade or business.

Suppose a Taxpayer Owns an Apartment Complex