The Office Building Donna Owned and Used for Her Desk-Top $\quad$

question 34

Essay

The office building Donna owned and used for her desk-top publishing business was destroyed by a hurricane. Although the basis of the building was $80,000, Donna carried replacement cost insurance and received $160,000 from the insurance company after it was determined that the building was a complete loss. It cost her $152,000 to rebuild the store in the current year. a. Calculate Donna's recognized gain, assuming an election under the $\quad$$\quad$ $__
involuntary conversion provision is made.
b. Calculate Donna's basis in the replacement building. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $__

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Definitions:

Keynesians

Keynesians are economists or followers of the economic theories of John Maynard Keynes, who advocate for active government intervention to manage economic cycles.

Crowding-Out

An economic theory that suggests increased government spending reduces or "crowds out" private sector spending and investment.

Fiscal Policies

Government policies related to taxation and spending that are used to influence the economy, manage inflation, and stimulate or slow down economic growth.

Bond Sales

The process of issuing debt securities by entities such as corporations or governments to investors to raise capital.