A lessor is paid $45,000 by its commercial tenant as a lease cancellation fee. The tenant wanted to get out of its lease so it could move to a different building. The lessor had held the lease for three years before it was canceled. The lessor had a zero tax basis for the lease. The lessor has received: a.Ordinary income of $45,000. b.Long-term capital gain of $45,000. c.Short-term capital gain of $45,000. d.Neither gain nor loss.
A lessor is paid $45,000 by its commercial tenant as a lease cancellation fee. The tenant wanted to get out of its lease so it could move to a different building. The lessor had held the lease for three years before it was canceled. The lessor had a zero tax basis for the lease. The lessor has received: a.Ordinary income of $45,000. b.Long-term capital gain of $45,000. c.Short-term capital gain of $45,000. d.Neither gain nor loss.
Chapter4: Additional Income And The Qualified Business Income Deduction
Section: Chapter Questions
Problem 15MCQ
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A lessor is paid $45,000 by its commercial tenant as a lease cancellation fee. The tenant wanted to get out of its lease so it could move to a different building. The lessor had held the lease for three years before it was canceled. The lessor had a zero tax basis for the lease. The lessor has received:
a.Ordinary income of $45,000.
b.Long-term capital gain of $45,000.
c.Short-term capital gain of $45,000.
d.Neither gain nor loss.
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