Sam's Office Building with an Adjusted Basis of $750,000 and a Fair

question 187

Multiple Choice

Sam's office building with an adjusted basis of $750,000 and a fair market value of $900,000 is condemned on November 30,2013.Sam is a calendar year taxpayer.He receives a condemnation award of $875,000 on March 1,2014.He builds a new office building at a cost of $845,000 which is completed and paid for on December 31,2016.What is Sam's recognized gain on receipt of the condemnation award and basis for the new office building assuming his objective is to minimize gain recognition?

• A)$0; $720,000.
• B)$30,000; $750,000.
• C)$30,000; $845,000.
• D)$150,000; $750,000.
• E)None of the above.

---

Definitions:

Bottom-Up Perception

A processing approach where sensory input is first analyzed into its components and then integrated to form a perception.

Perceptual Learning

A process through which practice or experience leads to improvements in the processing of sensory information.

Featural Analysis

A process in object recognition and perception involving the breakdown and analysis of sensory input into fundamental features or components.

Face Perception

The classification and recognition of stimuli that are faces.