Question: Issue Recognition Problems Identify the tax issue or issues suggested

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.

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  • CreatedNovember 03, 2015
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