Response to the following problem:
Albert owns 100 acres of land on which he grows spruce Christmas trees. His adjusted basis for the land is $100,000. He receives condemnation proceeds of $10,000 when the city's new beltway takes 5 acres along the eastern boundary of his property. He also receives a severance award of $6,000 associated with the pos- sible harmful effects of exhaust fumes on his Christmas trees. Albert invests the $16,000 in a growth mutual fund. Determine the tax consequences to Albert of the:
a. Condemnation proceeds.
b. Severance award.