An Office Building with an Adjusted Basis of $320,000 Was

question 72

Multiple Choice

An office building with an adjusted basis of $320,000 was destroyed by fire on December 30, 2019.On January 11, 2020, the insurance company paid the owner $450,000.The fair market value of the building was $500,000, but under the co-insurance clause, the insurance company is responsible for only 90 percent of the loss.The owner reinvested
$410,000 in a new office building on February 12, 2020, that was smaller than the original office building.What is the recognized gain and the basis of the new building if § 1033 (nonrecognition of gain from an involuntary conversion) is elected?

• A)$0 and $320,000.
• B)$0 and $410,000.
• C)$40,000 and $320,000.
• D)$130,000 and 410,000.

---

Definitions:

Multicultural Experiences

Interactions and engagements that involve or relate to multiple cultures, enhancing understanding and appreciation of cultural diversity.

International Assignments

Work assignments where employees are sent by their employers to work in a foreign country for a temporary period.

Global Environment

The international context within which organizations operate, influenced by economic, social, technological, and political factors across borders.

Divisional Structure

A structure that organizes a company by units according to the products they make, the customer segments they serve, or the geographic location in which they operate.