Reference no: EM132078432

Question - Huxley purchased 4 hectares of land in August 1982 for $45,000. At the time that he acquired the land Huxley anticipated that he would hold the land for a long period, and then perhaps resell the land at some time in the distant future. He purchased and held the land because he considered that the land represented a safe investment for his money and that generally land prices went up with inflation. Huxley sold the land to a property developer for $2,545,000 in March of the current tax year.

What amount should Huxley include as ORDINARY INCOME in his income tax return as a result of the sale of the land in the current income tax year?

$0 (a nil amount)

$45,000

$2,500,000

$2,545,000

None of the amounts are correct