Jared, a Fiscal Year Taxpayer with a August 31st Year-End

question 24

Multiple Choice

Jared, a fiscal year taxpayer with a August 31st year-end, owns an office building (adjusted basis of $800,000) that was destroyed by fire on December 24, 2017. If the insurance settlement was $950,000 (received March 1, 2018) , what is the latest date that Jared can replace the office building in order to qualify for § 1033 nonrecognition of gain?

• A)December 31, 2017.
• B)August 31, 2018.
• C)December 31, 2019.
• D)August 31, 2020.
• E)None of the above.

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Definitions:

Dividends Paid

Distributions of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders.

Net Income

The company's earnings remaining after deducting all expenses and tax obligations from its total revenues.

Common Stock

Equity securities representing ownership interests in a corporation, providing voting rights and potential dividends to shareholders.

Treasury Stock

Represents shares that were previously issued and outstanding but have been repurchased by the company and are held in its treasury.