Skeeter Invests in Vacant Land for the Purpose of Realizing

question 38

Multiple Choice

Skeeter invests in vacant land for the purpose of realizing a profit on its appreciation.He leases the land during the period he holds it.The unadjusted basis of the property is $75,000 and its fair market value is $105,000.The lease payments are $1,200 per year.

• A)The leasing activity will be treated as a rental activity and will be treated as a passive activity regardless of how many hours Skeeter participates.
• B)The leasing activity will be treated as a rental activity and will not be treated as a passive activity if Skeeter qualifies as a real estate professional.
• C)The leasing activity will not be treated as a rental activity.
• D)The leasing activity will be treated as a rental activity and will not be treated as a passive activity if Skeeter devotes more than 500 hours to the activity.
• E)None of the above.

---

Definitions:

Neurotransmitter

Chemical substances in the nervous system that transmit signals between neurons or from neurons to muscles.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes, known for its sedative and euphoric effects.

Expressed Emotion

A measure of how much hostility, criticism, and emotional over-involvement are used when speaking about a family member with a mental disorder.

Schizophrenics

Individuals diagnosed with schizophrenia, experiencing conditions such as distorted thinking, hallucinations, and reduced social engagement.