Sol Purchased Land as an Investment on January 12, 2011

question 35

Multiple Choice

Sol purchased land as an investment on January 12, 2011 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

• A)Long-term capital loss
• B)Long-term capital gain
• C)Short-term capital gain
• D)Short-term capital loss
• E)None of the above

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Definitions:

Price-earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, indicating market expectations.

Earnings Per Share

Earnings per share (EPS) is a financial metric that divides a company's profit by the number of outstanding shares, indicating the profitability attributed to each share.

Par Value

The nominal or face value of a stock or bond as stated by the issuing company, not necessarily reflecting its market value.

Statutory Restriction

Legal limitations or constraints, often imposed by law, that dictate how an organization can operate or use certain resources.