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Subject: Business Income vs. Capital Gain During 2020, Sandra Von Arb acquired a four-unit apartment building for $230,000. While it was her intention to operate
Subject: Business Income vs. Capital Gain
During 2020, Sandra Von Arb acquired a four-unit apartment building for $230,000. While it was her intention to operate the building as a rental property. One month after her purchase, she received an unsolicited offer to purchase the building for $280,000. She accepts the offer. Should the $50,000 be treated a capital gain or as business income? Justify your conclusion.
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