Sol purchased land as an investment on February 12, 2015 for $85,000. On January 31, 2016, 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 February 12, 2015 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?​

Quizplus · Accepted Answer

The land was held for less than a year (from February 12, 2015, to January 31, 2016), so the gain is considered short-term. Sol sold the land for more than the purchase price, resulting in a short-term capital gain.

Sol Purchased Land as an Investment on February 12, 2015