Inez is a freelance artist. She purchased 10 acres of land in 2006 for $5,000. On July 15, 2011, the land is condemned by the county government to build a new courthouse and jail facility. The county awards Inez $35,000 for the condemnation of the land. Inez uses the proceeds to purchase a building that she will use as a production studio for her artwork.
Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.