Ted Purchases Some Forest Land in 2012 with the Intention

question 4

Multiple Choice

Ted purchases some forest land in 2012 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 2013, Ted pays a contractor $4,000 to bulldoze and level the site of the log cabin. In 2014, 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 2012 and $5,000 of property taxes in 2013 and 2014 on the land. What is Ted's basis in the land at the end of 2014?

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

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Definitions:

Topical Anesthetic

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Ethical Principle

A fundamental guideline or rule that drives moral behavior and decision-making, often based on notions of right and wrong.

New Morbidity

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