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.

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Definitions:

Cumulative Experience

The total knowledge or skill that is gained through repeated exposure or activity over time.

Jung

Carl Jung, a Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts like archetypes, the collective unconscious, and individuation.

MBTI

The Myers-Briggs Type Indicator, a personality inventory classifying individuals into 16 psychological types based on preferences in perceiving the world and making decisions.

Theories

Systematically organized principles designed to explain and predict phenomena.