Reference no: EM132772684

Question - Mrs. Smith owns a retail store. A piece of land adjacent to her store became available for sale. She received a personal loan of $200,000 from her husband which involved a promissory note without interest. She purchased the land and turned it into a parking lot for customers (charging no parking fees). As a direct result of the parking lot her retail sales increased by 10% bringing in extra revenues of $20,000 in 2020 for the retail store. At the end of 2020 the city expropriated the land for $300,000 and it was not replaced. From the funds of the sale of the land she repaid the loan to her husband. What is the minimum amount that must be included in Mr. Smith's income for 2020?

a) $70,000

b) $50,000

c) $120,000

d) $60,000