Joyce's Office Building Was Destroyed in a Fire (Adjusted Basis

question 221

Multiple Choice

Joyce's office building was destroyed in a fire (adjusted basis of $350,000? fair market value of $400,000) . Of the insurance proceeds of $360,000 she receives, Joyce uses $310,000 to purchase additional inventory and invests the remaining $50,000 in short-term certificates of deposit. She received only $360,000 because of a co-insurance clause in her insurance policy. What is Joyce's recognized gain or loss?

• A) $0
• B) $10,000 loss
• C) $10,000 gain
• D) $40,000 gain
• E) None of the above

---

Definitions:

Power Assertion

A disciplinary method involving the use of authority or physical force to control or correct behavior.

Differential Susceptibility

Some physiological makeups can make an individual more likely to be affected by environmental influences than other people. For example, a child with a highly reactive temperament might be benefited more than other children by positive parenting but harmed more than others by negative parenting.

Temperaments

Inherent traits of a person's personality that influence their behavior and emotional reactions from a young age.

Parenting Strategies

Techniques or methods adopted by parents in the upbringing of their children to foster growth, discipline, and education.