Sam's Office Building with an Adjusted Basis of $750,000 and a Fair

question 25

Multiple Choice

Sam's office building with an adjusted basis of $750,000 and a fair market value of $900,000 is condemned on November 30, 2017. Sam is a calendar year taxpayer. He receives a condemnation award of $875,000 on March 1, 2018. He builds a new office building at a cost of $845,000 which is completed and paid for on December 31, 2020. What is Sam's recognized gain on receipt of the condemnation award and basis for the new office building assuming his objective is to minimize gain recognition?

• A)$0; $720,000.
• B)$30,000; $750,000.
• C)$30,000; $845,000.
• D)$150,000; $750,000.
• E)None of the above.

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Definitions:

Spinal Cord

A long, thin, tubular bundle of nervous tissue and support cells that extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column, playing a critical role in transmitting neural signals between the brain and the rest of the body.

Sympathetic Nerve Fibers

Nerve fibers that are part of the sympathetic nervous system, involved in the body's fight or flight response by activating bodily systems.

Parasympathetic Nerve Fibers

Components of the autonomic nervous system that help the body to relax and conserve energy, often referred to as the "rest and digest" system.

Nervous System

A complex network of nerves and cells that carry messages to and from the brain and spinal cord to various parts of the body.