During the current year, Sean’s office building is destroyed by fire. After collecting the insurance proceeds, Sean has a $50,000 recognized gain. The building was acquired in 1998, and the straight-line method of depreciation has been used. He does not plan to acquire a replacement building. In addition to the gain on the building, consider the following independent cases and determine his total net capital gain. For each case, include the $50,000 casualty gain described above.
a. Land used in his trade or business and held more than a year is condemned by the state. The recognized gain is $60,000.
b. Assume the same facts as in Part a, except the condemnation results in a $60,000 loss.
c. An apartment building used as residential rental property and held more than one year is destroyed by a sudden, unexpected mudslide. The building is not insured, and the loss amounts to $200,000.