Question

biefly explain whether the following receipt

is ordinary income for the

taxpayer

he taxpayer purchased land to use for growing corn. He bought the land for

$300,000 in 2005. He commenced farming activities but realised in

2007 that the

soil was not suitable for the crops he wished to grow. The taxpayer decided to sell

the land but he first wished to develop it for sale. He connected the necessary

services and delegated tasks to the relevant professionals. He had an agent

ar

range most of the sales. He slowly disposed of parts of the land over 10 years

until the final block was sold in 2017. The development costs were $500,000. He

sold 20 blocks and the total sum received was $1,400,000.

Answer 1