Len Jamal bought a parcel of land in 1999. 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.

Purchase Price: $4,000; Purchase Date: May 21, 1999

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, 2020

Payment terms: $40,000 down payment on purchase date; $20,000 payable on January 1 each year for the period January 1, 2021, through January 1, 2026, 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.

(There is an answer on coursehero for this question, but it does not answer the question which is asking to COMPARE THE INCOME TAX CONSEQUENCES .