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

question 52

Multiple Choice

The building used in Terry's business was condemned by the city of St.Louis.Terry received a condemnation award of $125,000.He paid $1,200 in lawyer's fees and $800 for an appraisal of the property.Terry's adjusted basis in the building was $60,000.Terry reinvests in similar property costing $110,000,and Terry makes the proper election regarding the property.What is the amount of Terry's recognized gain on the condemnation?

• A)$15,000
• B)$13,000
• C)$50,000
• D)$63,000

---

Definitions:

Employment

Employment is a contractual relationship between an employer and an employee where the employee provides labor or services in exchange for compensation.

Payroll Tax

Contributions demanded from employers or their staff, often pegged to a percentage of the paychecks disbursed to employees.

Equilibrium Wage

The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by workers.

Payroll Tax

A tax imposed on employers or employees, and is usually calculated as a percentage of the salaries that employers pay their staff.