It has already been shown that real estate may perform a number of distinct functions, and it follows that profits on real estate may arise in a number of different ways. Among the principal sources are the following, which correspond to the functions already discussed:

1. Profits from sales

Gains resulting from bargain and sale. Interest on deferred payments.

2. Profits from rents

3. Miscellaneous profits

Gains arising from enhancement of values; from consumption of assets, as in mining; from crops, profits accruing indirectly from the use of land for such buildings as factories, furnaces, etc.; profits pertaining to a broker or dealer; and profits obtained indirectly from the use of borrowed money secured by real estate.

In regard to each of these the following questions must be answered:

1. From what source do the profits come?

2. How can the amount of profits be determined?

3. Having determined this amount, what disposition should be made of it?