Julia purchased vacant land in 20×1 that she subdivided for resale as lots. All 10 of the lots were sold during

20×2. The lots had a tax basis of $3,000 each and sold for $45,000 each. Julia made no substantial improvements to the lots. She acted as her own real estate broker, so there were no sales expenses for selling the lots. Which of the following statements is correct?

Julia must hold the lots for at least 5 years before she is eligible for the special capital gain treatment of § 1237.

Some of the gain from the sale of the 10 lots is long-term capital gain.

All of the gain from the sale of the 10 lots is long-term capital gain.

To be eligible for the special capital gain treatment of § 1237, Julia must be a real estate dealer.

None of the above

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