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

question 56

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, 2019, 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 2,2020. 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:

Endocrine Glands

Organs that secrete hormones directly into the bloodstream to regulate various body functions.

Bloodstream

The flow of blood through the circulatory system of an organism, delivering nutrients and removing waste products.

Gland Duct

A passage or tube in the body through which secretions from glands are conveyed to various organs or body surfaces.

Microvilli

Tiny, finger-like projections from the surface of some cells, increasing their surface area for absorption.