Dinah Owned Land with a FMV of $130,000 (Adjusted Basis

question 83

Multiple Choice

Dinah owned land with a FMV of $130,000 (adjusted basis $120,000) which is investment property (a capital asset) .Dinah owned a second tract of land,a 1231 asset,with a FMV of $46,000 (adjusted basis $50,000) .Both tracts were acquired in 2001 and condemned by the state this year.The state paid an amount equal to FMV.If there are no other transactions involving capital assets or 1231 assets,Dinah must report on her current year return

• A)$6,000 net ordinary income.
• B)$6,000 net Sec.1231 gain treated as a net capital gain.
• C)a LTCG of $10,000 and a 1231 loss of $4,000.
• D)a LTCG of $10,000 and a nondeductible loss of $4,000.

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Definitions:

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