Hakims rental building (a 1231 asset) was not insured when it was destroyed by a hurricane.

Question:

Hakim’s rental building (a § 1231 asset) was not insured when it was destroyed by a hurricane. His adjusted basis for the building was substantial but was less than he had paid for the building in 2016. The building was Hakim’s only asset that was damaged by the hurricane. How should Hakim handle this situation?

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