Question

Sol purchased land as an investment on February 12, 2018 for $85,000. On January 31, 2019, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

Answer 1

Answer:

c)Short term capital gain.

Explanation:

Since in the question it is mentioned that the land is purchased by Sol as on Feb 12,2018 for $85,000 and the land was sold by Sol as on Jan 31, 2019 for $90,000 in cash

So as we can see the difference in the purchase date and sale date would be less than one year and the transactions related to the capital assets would be termed as capital gain

Since it is less than one year so it is a short term capital gain

Hence, the correct option is c.