Len Jamal bough a parcel of land in 1997. It was his intention that he would relocate his proprietorship business to the land some day. However, the city continued to delay issuing permits to landowners in the area and eventually Len purchased another property to relocate his proprietorship business to. He held onto the land for a number of years but has now decided that he needs the cash and will sell the property. The details related to his purchase of the land are set out below.

• Purchased Price: $4,000; Purchase Date: May 21, 1997
• Len has received an offer from an acquaintance to purchase the land. The payment terms are set out below and are considered to represent fair market value
• Purchase Price: $160,000; Purchase Date: October 1, 2017
• Payments terms: $40,000 down payment on purchase date; $20,000 payable on January 1 each year for the period January 1, 2018 through January 1, 2023 inclusive. Interest: Interest is payable at 6% annually on the unpaid balance.
• Len is uncertain as to whether the disposition is on account of capital or income
• You have been asked to compare the income tax consequences to Len of this sale if the sale is on account of capital and, alternatively, if it is on account of income. Do not calculate the interest income. Ignore the consequences and calculation of the interest income.