Foreaker LLC Sold a Piece of Land That It Uses

question 114

Multiple Choice

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

• A)$9,500 §1221.
• B)$9,500 §1231.
• C)$9,500 §1245.
• D)$9,500 §1250.
• E)None of the choices are correct.

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Definitions:

Gain Or Loss

The difference between the sale price of an asset and its original purchase price, indicating a financial profit or loss.

Nature Of Gain

The classification of profit obtained from various sources such as capital gains, business operations, or investment income, influencing tax treatment.

Inherited Property

Property received from a deceased person's estate by legal succession or by the terms of a will.

FMV (Fair Market Value)

The price that an asset would sell for on the open market between a willing buyer and seller.