A Factory Building Owned by Amber, Inc

question 20

Multiple Choice

A factory building owned by Amber, Inc. is destroyed by a hurricane. The adjusted basis of the building was $400,000 and the appraised value was $425,000. Amber receives insurance proceeds of $390,000. A factory building is constructed during the nine-month period after the hurricane at a cost of $450,000. What is the recognized gain or loss and what is the basis of the new factory building?

• A) $0 and $450,000.
• B) $0 and $460,000.
• C) ($10,000) and $440,000.
• D) ($10,000) and $450,000.
• E) None of the above.

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Definitions:

Association

The connection or linkage between two concepts, items, or processes, often studied in psychology regarding memory and learning.

Causation

The action of causing something, establishing a relationship where one event is the result of another.

Corporal Punishment

A disciplinary method involving the use of physical force with the intention of causing a child to experience pain, but not injury, for the purposes of correction or control.

Criminal Behavior

Actions that violate laws and are punishable by the state or other authority.