What transaction should have generated a capital gain

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Problem 1: Case AA taxpayer carried on a full time business as an interior designer. While carrying on this business he bought, lived in for short periods of time, and resold numerous residential properties. In most cases, improvements were made and the property modernized prior to resale. The sales prices were usually well in excess of costs.

Question 1: In this case, indicate whether you feel the transaction should have generated a capital gain or income. Explain the basis for your conclusion.

Reference no: EM132468275

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