Kareem's office building is destroyed by fire on April 11, 2014. Settlement is reached with the insurance company on November 1, 2014 when he receives a check for $900,000. The property had recently been appraised for $920,000. Kareem's adjusted basis in the building was $800,000.
a. What is Kareem's realized gain or loss?
b. Assume Kareem wishes to defer the maximum amount of gain. Indicate:
c. Assume that instead of a fire, the state forces Kareem to sell the property. Indicate how your responses to part b would differ.
Definitions:
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