What is effect on the karls individual income tax

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what is effect on the Karl's individual income tax with the following conditions?( tax year 2011)

(1)On October 5, the City of Columbia condemned unimproved property owned by Karl for the construction of a new police station. The land consisted of 2 vacant lots at 3400 and 3402 Cardinal Lane and had been acquired by Karl as an investment on 5/25/04 for $14,000. In exchange for the lots, on 2/15/11, the City gave Karl a large parcel of land at 440 Pine Street with a fair market value of $20,000. Karl was satisfied with the exchange because Pine Street is in a better neighborhood and has greater potential for appreciation.

(2)On 11/22, they sold a gun collection for $32,500. The gun collection was gifted to Karl by his father on 12/25/07 when it had a fair market value of $22,000. His father's cost basis was $14,000 when it was acquired in 1997.

Reference no: EM13123254

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