A warehouse with an adjusted basis of $125,000 was destroyed by a tornado on April 15, 2018. On June 15, 2018, the insurance company paid the owner $195,000. The owner reinvested $170,000 in another warehouse. What is the basis of the new warehouse if non-recognition of gain from an involuntary conversion is elected?

a. $100,000.

b. $125,000.

c. $170,000.

d. $195,000.