Question
biefly explain whether the following receipt is ordinary income for the taxpayer he taxpayer purchased land to use for growing corn. He bought the land
biefly explain whether the following receipt
is ordinary income for the
taxpayer
he taxpayer purchased land to use for growing corn. He bought the land for
$300,000 in 2005. He commenced farming activities but realised in
2007 that the
soil was not suitable for the crops he wished to grow. The taxpayer decided to sell
the land but he first wished to develop it for sale. He connected the necessary
services and delegated tasks to the relevant professionals. He had an agent
ar
range most of the sales. He slowly disposed of parts of the land over 10 years
until the final block was sold in 2017. The development costs were $500,000. He
sold 20 blocks and the total sum received was $1,400,000.
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