Four years ago, Otto purchased farmland for $600,000 and spent an additional $40,000 on soil and water
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Four years ago, Otto purchased farmland for $600,000 and spent an additional $40,000 on soil and water conservation which was deducted in the year of purchase Otto has just sold the land for $900,000.
How much of the $300,000 gain will be treated as ordinary income.
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