Series 7 Exam Question 399: Answer and Explanation

Question: 399

What is the primary objective for an individual who invests in undeveloped land?

  • A. Depletion deductions
  • B. Depreciation deductions
  • C. Appreciation potential
  • D. Tax-deferred income

Correct Answer: C

Explanation:

C. The primary reason for investing in undeveloped land is appreciation potential. People who invest in undeveloped land either privately or by way of a real-estate DPP are hoping that their land will be of more value sometime in the near future.

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