Involuntary Conversions $($LO $8\mathrm{.}12)$

Teresa's manufacturing plant is destroyed by fire. The plant has an adjusted basis of $$309,800,$ and Teresa receives insurance proceeds of $$464,700$ for the loss. Teresa reinvests $$487,935$ in a replacement plant within $2$ years of receiving the insurance proceeds.

If an amount is zero, enter $"0".$

Question Content Area

a$.$ Calculate Teresa's recognized gain if she elects to utilize the involuntary conversion provision.

b$.$ Calculate Teresa's basis in the new plant.