An office building with an adjusted basis of $320,000 was destroyed by fire on December 30, 2015. On January 11, 2016, the insurance company paid the owner $450,000. The fair market value of the building was $500,000, but under the co-insurance clause, the insurance company is responsible for only 90% of the loss. The owner reinvested $410,000 in a new office building on February 12, 2016, that was smaller than the original office building. What is the recognized gain or loss and the basis of the new building if Section 1033 is elected?
a. $0 and $320,000
b. $0 and $410,000
c. $40,000 and $320,000
d. $130,000 and $410,000