Question

Maria held vacant land that qualified as an investment asset. She purchased the land on April 20, 2014, and sold it on November 22, 2018. What was the holding period on the land?

A) 4 years, 7 months, and 2 days
B) 4 years, 6 months, and 2 days
C) 4 years, 6 months, and 12 days
D) 4 years, 7 months, and 12 days

Answer 1

The holding period for Maria's land is 4 years, 7 months, and 2 days (option A), starting a day after the purchase date until the sale date, which is from April 20, 2014, to November 22, 2018.

Step-by-step explanation:

The question pertains to determining the holding period of a piece of land that was used as an investment asset by Maria. To calculate the holding period, start counting from the day after the purchase until the day of the sale is completed.

Maria purchased the land on April 20, 2014, and sold it on November 22, 2018. Therefore, the holding period would be from April 21, 2014, to November 22, 2018.

For the calculation:

• From April 21, 2014, to April 20, 2015, is 1 year.
  
  
• From April 21, 2015, to April 20, 2016, is another year, making it 2 years.
  
  
• Continue in this manner until you reach April 20, 2018, which adds up to 4 years.
  
  
• Finally, count the remaining months from April 21, 2018, to November 22, 2018, which is 7 months and 2 days.

Thus, the correct holding period for Maria's land is Option A: 4 years, 7 months, and 2 days.