2. A capital gain or loss can be recognized for tax purposes only when capital property is sold. Is this statement true? 3. An investor acquired a residential high-rise apartment as an investment. The property has now been owned for 11 years and annually has provided reasonable net rental income. Tis net rental income has been reinvested in other types of properties as well as in improvements to the apartment building. The owner is considering either selling the property to another investor or dividing the property into separate condominium units that will be marketed to existing tenants and to the public. Explain how gain on a sale will be treated for tax purposes under each alternative. 4. What advantage can a taxpayer achieve by incurring a capital gain on a property and permitting the purchasers pay the property over a number of years? 5. When an investor buys some shares of a corporation at one price and later buys more shares of same corporation at another price, how does the investor determine the cost for tax purposes when some, but not all, of the shares are eventually sold?