B purchased two parcels of land in 2015 for $40,000 each. Parcel 1 was purchased to...

 

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B purchased two parcels of land in 2015 for $40,000 each. Parcel 1 was purchased to hold until its value increased and then offered for sale. Parcel 2 was purchased to build a rental property and collect rents over time. In 2021 parcel 1 was sold for $30,000 and parcel 2 was sold for $100,000 as part of the rental property sale. Determine the amount that B's net income for tax purposes will increase in 2021. B purchased two parcels of land in 2015 for $40,000 each. Parcel 1 was purchased to hold until its value increased and then offered for sale. Parcel 2 was purchased to build a rental property and collect rents over time. In 2021 parcel 1 was sold for $30,000 and parcel 2 was sold for $100,000 as part of the rental property sale. Determine the amount that B's net income for tax purposes will increase in 2021.

Answer rating: 100% (QA)

Capital is amounting resulting from sale of asset Capital can further be classified as either ... View the full answer