Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

Question

Quizplus · Accepted Answer

Since the land was held for more than one year and used in Foreaker's business, the gain is a long-term capital gain under §1231. The gain is calculated as the selling price ($52,000) minus the basis ($42,500), which equals $9,500.

Foreaker LLC Sold a Piece of Land That It Uses