The Accrual Basis Taxpayer Sold Land for $100,000 on December

question 21

Multiple Choice

The accrual basis taxpayer sold land for $100,000 on December 31, 2019.He did not collect the $100,000 until January 2, 2020.The land was held as an investment.

• A)If the accrual basis taxpayer's basis in the land was $110,000, the loss would be recognized in 2020.
• B)If the accrual basis taxpayer's basis in the land was $60,000, the gain must be reported in 2019.
• C)If the accrual basis taxpayer's basis in the land was $60,000, the gain must be reported in 2020, unless the taxpayer elects to not use the installment method.
• D)The accrual basis taxpayer must recognize the gain or loss in the year of sale.
• E)None of these.

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Definitions:

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period without exposure to the conditioned stimulus.

Stimulus Generalization

The process by which a conditioned response becomes associated with stimuli that are similar but not identical to the original conditioned stimulus.

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented along with an unconditioned stimulus.

Heredity

The transmission of physical or mental traits from one generation to the next through genetics.