In 2013,Joe purchased land for $83,500 for use in his business.He sold it in 2016 for $110,000.What is the gain on the sale before any netting?
A)$26,500 Section 1231 gain.
B)$26,500 ordinary income.
C)$26,500 Section 1245 gain.
D)$26,500 Section 1250 gain.

Question

Quizplus · Accepted Answer

The gain on the sale would be calculated as follows:
Sale price: $110,000
Less: Basis (purchase price): $83,500
Gain before any netting: $26,500
Since the property was used in his business, it would be considered a Section 1231 asset. Therefore, the gain would be classified as a Section 1231 gain.

In 2013,Joe Purchased Land for $83,500 for Use in His