Johnny Owned a Gas Station with an Adjusted Basis of $300,000

question 62

Multiple Choice

Johnny owned a gas station with an adjusted basis of $300,000. After it was destroyed in a fire, he received $560,000 from the insurance company. Within the next year, he bought a new gas station for $500,000. What is Johnny's taxable gain and what is the basis in the new building?

• A)$260,000; $500,000
• B)$200,000; $300,000
• C)$60,000; $300,000
• D)$260,000; $300,000
• E)$60,000; $500,000

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Definitions:

Cesarean Section

A surgical procedure used to deliver a baby through incisions in the mother's abdomen and uterus.

Miscarriages

The spontaneous loss of a pregnancy before the fetus is viable outside the womb, typically occurring before the 20th week of gestation.

Infertility

The inability to conceive a child after one year of regular, unprotected sexual intercourse, affecting both males and females for various reasons.

Expectant Father

A man whose partner is pregnant, awaiting the birth of their child.