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?

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Definitions:

Best Value

Refers to the most advantageous combination of cost, quality, and sustainability to achieve the greatest net benefit.

Request for Proposal (RFP)

A document issued by a company or organization asking for detailed proposals from vendors for the provision of goods or services.

Traveling Requisitions

Requests for goods or services that are initiated or approved while the requester is away from their primary office location.

Business Trips

Travel undertaken for work or business purposes, often involving meetings or inspections at locations away from the usual workplace.