In 2010,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2016 for $94,000.If Niveen has no other sales of business or trade property,how will this gain be taxed?
A)$6,000 long-term capital gain.
B)$6,000 short-term capital gain.
C)$6,000 ordinary income.
D)$6,000 Section 1231 gain.

Question

Quizplus · Accepted Answer

The gain on the sale of the land is a capital gain since it is a sale of a capital asset. Since Niveen held the land for more than one year, it is considered a long-term capital gain. The difference between the sales price of $94,000 and the purchase price of $88,000 is $6,000, which is the amount of the capital gain. Therefore, the gain will be taxed as a long-term capital gain.

In 2010,Niveen Purchased Land for $88,000 for Use in Her