Issue Recognition Problems Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.
In 2013, an office building owned by Firm F was completely destroyed by fire. F’s adjusted basis in the building was $485,000, and its insurance reimbursement was $550,000. On its 2013 tax return, F elected to defer the $65,000 gain realized on the in-voluntary conversion. In 2015, F invested $560,000 in another office building. In 2016, F settled a dispute with its insurance company concerning the 2013 claim. Pursuant to the settlement, it received a $25,000 additional reimbursement.

  • CreatedNovember 03, 2015
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