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.