Property Ownership
In Illinois, how is real property classified for the purpose of capital gains taxation upon sale?
AReal property is always taxed as ordinary income
BReal property held for more than one year qualifies for long-term capital gains tax treatment✓ Correct
CIllinois does not have a capital gains tax on real property
DReal property is exempt from federal capital gains tax if sold through a licensed broker
Explanation
Federal capital gains tax treatment depends on the holding period. Real property held for more than one year qualifies for long-term capital gains rates (0%, 15%, or 20% depending on income), which are generally lower than ordinary income tax rates.
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