Refer to the facts of problem 44. Write a letter to Grant Industries explaining why it might want to recognize the entire gain on the condemnation.
In Problem 44
Grant Industries' warehouse is condemned by the city on August 18, 2016. Because of widespread publicity leading up to the condemnation, Grant anticipates it and purchases a replacement warehouse on April 15, 2016, for $670,000. The city pays Grant $430,000 for the condemned property, which has an adjusted basis to Grant of $220,000.