Mike beasley buys and sells real estate. on december 31, 2016, his inventory of property included a tract of undeveloped land for which he had paid $800,000. the fair market value of the land was $900,000 at that date. how much income should beasley report for 2016 in connection with this land?

Question

Business

Arielle Cannon

15 June, 01:48

Mike beasley buys and sells real estate. on december 31, 2016, his inventory of property included a tract of undeveloped land for which he had paid $800,000. the fair market value of the land was $900,000 at that date. how much income should beasley report for 2016 in connection with this land?

+1

Answers (1)

Know the Answer?

Gilberto Roman · Answer 1

In this case, It is mentioned that Mike Beaskey has paid $800,000 but it is not mentioned that he has sold at $900,000 it is just a market value of that date. But just to show someone or for own assumption, Mike Beaskey should report $100,000 (12.50% profit) income for 2016 if he sells that price otherwise, he need not to show any income if he does not sell.