Ted Purchases Some Forest Land in 2011 with the Intention

question 48

Multiple Choice

Ted purchases some forest land in 2011 with the intention of building a log cabin to use as a vacation home.To obtain the land,Ted pays $10,000 cash,assumes the seller's $19,000 mortgage on the land and pays $3,000 in commissions and legal fees related to the purchase.In 2012,Ted pays a contractor $4,000 to bulldoze and level the site of the log cabin.In 2013,Ted has a well dug and water and sewer lines laid in the ground at a cost of $6,000.Ted paid $2,000 of property taxes in 2011 and $5,000 of property taxes in 2012 and 2013 on the land.What is Ted's basis in the land at the end of 2013?

• A)$54,000
• B)$42,000
• C)$38,000
• D)$36,000
• E)$32,000

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Definitions:

Democratic Self-Government

The principle or system where citizens have the authority to decide on laws and policies directly or through elected representatives, embodying democracy.

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A war between groups within the same country or state, often over control of the government, territorial independence, or ideological differences.

Imagery

The use of vivid and descriptive language to add depth and understanding, helping readers visualize scenes, sounds, smells, and textures.

Homestead Strike

An industrial lockout and strike in 1892 at the Homestead Steel Works in Pennsylvania, emblematic of the intense labor disputes of the era.