On May 1,2016,Kelalani Purchased Land for $88,000 for Use in Her

question 72

Multiple Choice

On May 1,2016,Kelalani purchased land for $88,000 for use in her business.She sold it on May 1,2017,for $82,000.If there are no other sales of business or trade property,how is this loss treated for tax purposes on Kelalani's return?

• A)$6,000 short-term capital loss.
• B)$6,000 long-term capital loss.
• C)$6,000 ordinary loss.
• D)$6,000 Section 1231 loss.

---

Definitions:

Purchase Merchandise

The act of buying goods for sale, typically involving the selection, negotiation, and financial transaction for those goods.

(Paid-In) Capital

The amount of money that a company has received from shareholders in exchange for stock.

Stockholders

Individuals or entities that own shares in a corporation, giving them certain rights and potential for profits based on the company's performance.

Accounts Payable

The amount of money that a company owes to its creditors or suppliers for goods and services that have been received but not yet paid for.