Answer:
The gain on transaction of Building is $40,000 and of land is $60,000, so total gain is $100,000.
Explanation:
According to the scenario, the given data are as follows:
Cash Appreciation = $0
Building Appreciation = $40,000
Land Appreciation = $60,000
So, We can analyze the gain or loss for WFI after complete liquidation as follows:
So, on the transaction of the building, as building has an appreciation of $40,000, it will make a gain to WFI of $40,000.
Similarly, on the transaction of land, as land has an appreciation of $60,000, it will make a gain to WFI of $60,000.
So, total Gain = $40,000 + $60,000 = $100,000
