Bennett purchased a tract of land for $20,000 in 2010 when he heard that a new highway was going to be constructed through the property and the land would soon be worth $200,000. The highway project was abandoned in 2016 and the value of the land fell to $15,000. Bennett can claim a loss in 2016 of:

Question

Quizplus · Accepted Answer

Bennett cannot claim a loss because the loss is unrealized; he has not sold the land. The value decrease does not result in a deductible loss for tax purposes.

Bennett Purchased a Tract of Land for $20,000 in 2010