Question

Albert purchased a tract of land for $140,000 in 2015 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000. Highway engineers surveyed the property and indicated that he would probably get $180,000. The highway project was abandoned in 2018 and the value of the land fell to $100,000. What is the amount of loss Albert can claim in 2018?

a. $40,000
b. $60,000
c. $80,000
d. $100,000
e. None of the above

Answer 1

The amount of loss Albert can claim in 2018 is $80,000.

Step-by-step explanation:

To calculate the amount of loss Albert can claim in 2018, we need to compare the value of the land in 2018 ($100,000) with the amount he expected to receive if the highway was constructed ($180,000). The loss would be the difference between these two values, which is $80,000. Therefore, the amount of loss Albert can claim in 2018 is $80,000.