Research Problem: Ben Brown owns various plots of land in Folsom County, California. He acquired the land at various times during the last 20 years.
Research Problem: Ben Brown owns various plots of land in Folsom County, California. He acquired the land at various times during the last 20 years. About every fourth year, Ben subdivides into lots one of the properties he owns. He then has water, sewer, natural gas, and electricity hookups put in each lot and paves new streets. Ben has always treated his sales of such lots as sales of capital assets. His previous tax returns were prepared by an accountant whose practice you recently purchased. Has the proper tax treatment been used on the prior tax returns? Which statutory should be referred to in a Tax File Memo and a client letter.
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