Kristi Had a Business Building Destroyed in an Earthquake

question 99

Essay

Kristi had a business building destroyed in an earthquake. The old building was purchased for $250,000, and $80,000 of depreciation deductions had been taken. Her insurance proceeds were $550,000. Although the replacement property was much larger and nicer than her old building, Kristi's new property qualified as replacement property. She acquired the new property 13 months after the earthquake for $620,000. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

---

Definitions:

Physiology

The scientific study of the functions and mechanisms which work within a living system.

Philosophy

The study of the fundamental nature of knowledge, reality, and existence.

Structuralism

An approach to psychology based on the idea that conscious experience can be broken down into its basic underlying components or structures.

Functionalism

A theory in psychology that emphasizes the purpose and practical function of mental processes in adapting to the environment.