Question
Sarah Ives purchased a piece of land in 20X8 in order to operate a greenhouse and an evergreen nursery. This was to be Sarah's first
Sarah Ives purchased a piece of land in 20X8 in order to operate a greenhouse and an evergreen nursery. This was to be Sarah's first entrepreneurial adventure which she would tend to when not teaching her grade six classes. Now, one year later she still has not started her business and upon receiving an offer to teach on a tropical island, has decided to sell the land. Which of the following statements is TRUE when trying to determine the type of income that Sarah must report on her tax return?
Sarah's primary intent suggests that the income should be treated as a business transaction.
Sarah purchased the land with the primary intent to recognize a long-term economic benefit.
Sarah purchased the land with the primary intent to resell it at a profit.
The intent of the purchase is insignificant when determining the type of income to report.
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