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On January 10,2015,Wally Sold an Option for $2,000 on Vacant

question 120

Essay

On January 10,2015,Wally sold an option for $2,000 on vacant land he held as an investment.He had purchased the land in 2011 for $76,000.The option allowed the option holder to purchase the property for $122,000 plus the cost of the option.On March 1,2015,the option holder exercised the option.What is the amount and nature of Wally's gain or loss from disposition of the land?


Definitions:

Eyewitness

A person who has personally seen something happen and so can give a first-hand description of it.

Earthquake

A natural phenomenon occurring due to the sudden release of energy in the Earth's crust, resulting in ground shaking.

Agoraphobic

A person suffering from agoraphobia, an anxiety disorder characterized by intense fear of places or situations where escape might be difficult or help unavailable.

Open Spaces

Areas of land that are not built up and are often preserved for recreation, leisure, or environmental conservation.

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