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Author Question: Heather purchased undeveloped land to drill for oil and gas. She spent $800,000 on intangible ... (Read 82 times)

asmith134

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on: Sep 13, 2020

Question 1

Four years ago Otto purchased farmland for $600,000 and spent an additional $40,000 on soil and water conservation which was deducted in the year of purchase. Otto has just sold the land for $900,000. How much of the $300,000 gain will be treated as ordinary income?
◦ $0
◦ $24,000
◦ $40,000
◦ $300,000

Question 2

Heather purchased undeveloped land to drill for oil and gas. She spent $800,000 on intangible drilling costs during the year of purchase, which she elected to immediately deduct. During the three years of the well's operation, Heather deducted $1.2 million of cost depletion. Heather has sold the property for a $3 million gain. The gain will be treated as
◦ $3 million Sec. 1231 gain.
◦ $3 million ordinary gain
◦ $2 million ordinary income and $1 million Sec. 1231 gain.
◦ $1.2 million ordinary income and $1.8 million Sec. 1231 gain.
Federal Taxation 2017 Individuals ¦ Pope, Rupert, Anderson ¦ 30th Edition
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Marked as best answer by asmith134 on Sep 13, 2020

robbielu01

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Reply #1 on: Sep 13, 2020
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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asmith134

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Reply 2 on: Sep 13, 2020
Great answer, keep it coming :)

abro1885

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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