Question
During 2021, Steve purchased land for $50,000. On December 31, 2023, a professional real estate appraiser valued this land at $80,000. In January 2024, Steve
During 2021, Steve purchased land for $50,000. On December 31, 2023, a professional real estate appraiser valued this land at $80,000. In January 2024, Steve borrowed $20,000 from a local bank, using this land as collateral for the loan. On March 1, 2027, Steve sold this land for $90,000. Which statement is TRUE?
Steve must recognize $30,000 of gross income in 2023.
Steve must recognize $20,000 of gross income in 2024.
Steve must recognize $40,000 of gross income in 2027.
Steve must recognize $90,000 of gross income in 2027.
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South Western Federal Taxation 2015
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
38th Edition
978-1305310810, 1305310810, 978-1285439631
