The Building Used in Tim's Business Was Condemned by the City

question 33

Multiple Choice

The building used in Tim's business was condemned by the city of Lafayette.Tim received a condemnation award of $125,000.He paid $1,200 in lawyer's fees and $800 for an appraisal of the property.Tim's adjusted basis in the building was $60,000.Tim reinvests in similar property costing $110,000,and Tim makes the proper election regarding the property.What is the amount of Tim's realized (not recognized) gain on the condemnation?

• A)$0
• B)$50,000
• C)$63,000
• D)$65,000

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Definitions:

French Company

A business entity that is registered and operates within France or is formed under French law.

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An exchange rate expressed as the amount of foreign currency one unit of domestic currency can buy.

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An exchange rate presented as the local currency for each unit of the international currency.

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The official currency of Japan, widely recognized by its symbol ¥ and used extensively in international trade.