Jessicas office building is destroyed by fire on November 15, 2018. The adjusted basis of the building
Question:
Jessica’s office building is destroyed by fire on November 15, 2018. The adjusted basis of the building is $410,000. She receives insurance proceeds of $550,000 on December 12, 2018.
a. Calculate her realized and recognized gain or loss for the replacement property if she acquires an office building in December 2018 for $550,000.
b. Calculate her realized and recognized gain or loss for the replacement property if she acquires an office building in December 2018 for $495,000.
c. What is her basis for the replacement property in (a) and in (b)?
d. Calculate Jessica’s realized and recognized gain or loss if she does not invest in replacement property.
Step by Step Answer:
Fundamentals Of Taxation 2019
ISBN: 9781260158670
12th Edition
Authors: Ana M. Cruz Dr., Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone