Brian purchased a block of land in June 1987 for $110,000. At the time that he acquired the land he did not anticipate selling it in the near future. He purchased and held the land because he considered that the land represented a safe investment for his money and that generally land prices went up with inflation. Brian sold the land for $250,000 in the current income year. Which of the following statements about Brian is most correct? a. The amount is not ordinary income but may be assessed under the capital gains provisions. b. The entire $250,000 is ordinary income. c. Section 15-15 ITAA97 will apply to make the amount of $140,000 assessable income. d. Section 25A ITAA36 will apply to make the amount of $140,000 assessable income.
Brian purchased a block of land in June 1987 for $110,000. At the time that he acquired the land he did not anticipate selling it in the near future. He purchased and held the land because he considered that the land represented a safe investment for his money and that generally land prices went up with inflation. Brian sold the land for $250,000 in the current income year. Which of the following statements about Brian is most correct? a. The amount is not ordinary income but may be assessed under the capital gains provisions. b. The entire $250,000 is ordinary income. c. Section 15-15 ITAA97 will apply to make the amount of $140,000 assessable income. d. Section 25A ITAA36 will apply to make the amount of $140,000 assessable income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Brian purchased a block of land in June 1987 for $110,000. At the time that he acquired the land he did not anticipate selling it in the near future. He purchased and held the land because he considered that the land represented a safe investment for his money and that generally land prices went up with inflation. Brian sold the land for $250,000 in the current income year. Which of the following statements about Brian is most correct?
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a. |
The amount is not ordinary income but may be assessed under the |
|
|
b. |
The entire $250,000 is ordinary income. |
|
|
c. |
Section 15-15 ITAA97 will apply to make the amount of $140,000 assessable income. |
|
|
d. |
Section 25A ITAA36 will apply to make the amount of $140,000 assessable income. |
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