Pedro Owns 5 Rental Properties

question 13

Multiple Choice

Pedro owns 5 rental properties. He contracts with East Lake Properties, Inc., to manage the real estate. East Lake obtains tenants, negotiates leases, makes necessary repairs, pays expenses related to the properties, and remits monthly net receipts to Pedro.
I.Pedro's sale of the properties at a gain will result in a capital gain.
II.Pedro's sale of the properties at a loss results in an ordinary loss on his tax return.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Thursdays

The fifth day of the week following Wednesday and preceding Friday, according to the international standard ISO 8601.

Wednesdays

The fourth day of the week, coming between Tuesday and Thursday.

Sundays

The day of the week following Saturday and preceding Monday, often considered a day of rest or religious observance in many cultures.

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An individual's personal assessment of their own life satisfaction, happiness, and emotional health.