Sidney, a Calendar Year Taxpayer, Owns a Building (Adjusted Basis

question 68

True/False

Sidney, a calendar year taxpayer, owns a building (adjusted basis $450,000) in Columbus, OH, in which he conducts his retail computer sales business. The building is destroyed by fire on December 12, 2018, and two weeks later he receives insurance proceeds of $600,000. Due to family ties, Sidney decides to move to Columbia, SC. He reinvests all of the insurance proceeds in a building in Columbia where he opens a retail computer sales business on April 2,2019. By electing § 1033, Sidney has no recognized gain and a basis in the new building of $450,000 ($600,000 cost -$150,000 postponed gain).

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Definitions:

Products

Items or services offered for sale by a business to satisfy the needs or wants of consumers.

Services

Intangible activities or benefits that are provided or sold as the primary product, such as healthcare, education, maintenance, or entertainment, distinguishable from physical goods.

Global Competition

Refers to the situation where businesses compete with each other on a global scale, dealing with competitors from various countries.

Market Products

The act of promoting and selling goods or services, including market research and advertising to the targeted consumer base.