Problem
Individual A has been your long time tac client. Over the years, you have assisted A in setting up partnerships and joint ventures to develop real estate. You have not been involved in the preparation of A's federal income tax returns.
At 8:00 am on Oct. 17, 2022, the last day for filing an extended 2021 federal income tax return, you receive a call from A and his tax return preparer. During the year A sold a parcel of property which he indicates was held for investment which would generate a very large capital gain. A's return preparer is concerned that since A is in the real estate development business the gain should be treated as ordinary income. A is asking you to give his return preparer assurances that the gain should be treated as a capital gain.
How should you respond to A and A's tax return preparer?