What Is the Character of Land Used in an Active

question 58

Multiple Choice

What is the character of land used in an active trade or business for two years?

• A)Capital.
• B)Ordinary.
• C)§1231.
• D)Investment.
• E)None of thesE.Land and depreciable assets used in a trade or business for more than one year are §1231 assets.

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Definitions:

Income Summary

Income Summary is an account in the general ledger used to transfer the revenues and expenses of an accounting period to the retained earnings account.

Salary Allowances

Compensation above the base pay, often for specific purposes such as housing, transportation, or cost of living adjustments.

Profit And Loss

A financial statement detailing the revenues, costs, and expenses incurred during a specific period, highlighting a company's net profit or loss.

Two Proprietorships

Two separate businesses or commercial ventures, each owned by a single individual.