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:

Economic Growth

A growth in an economy's ability to produce goods and services when comparing one time period to another.

Outward Shift

A movement of a curve away from the origin on a graph, typically indicating an increase in supply or demand.

Comparative Advantage

The proficiency of an individual or group in executing a certain economic function more effectively than other tasks.

Lowest Cost

The scenario in which the expenditure required to achieve a certain objective or to purchase goods and services is minimized.