Albert purchased a tract of land for $140,000 in 2013 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 2016 and the value of the land fell to $100,000.What is the amount of loss Albert can claim in 2016?
A)$40,000
B)$60,000
C)$80,000
D)$100,000
E)None of the above

Question

Quizplus · Accepted Answer

Albert cannot claim a loss in 2016 because the loss is not realized; it is only a decrease in market value, not an actual sale or disposition of the property.

Albert Purchased a Tract of Land for $140,000 in 2013