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

question 99

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, 2019. Sam is a calendar year taxpayer. He receives a condemnation award of $875,000 on March 1,2020. He builds a new office building at a cost of $845,000 that is completed and paid for on December 31, 2022. 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 these.

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Definitions:

Crest Poles

Crest poles, more commonly referred to as totem poles, are monumental sculptures carved from trees by Indigenous peoples of the Pacific Northwest coast of North America, featuring a series of crests representing clan lineage, rights, and stories.

Métis

People indigenous to North America whose background is Aboriginal and European ancestry.

French-Canadian

Pertaining to individuals of French descent who are residents of Canada, particularly in the province of Quebec.

Indigenous

Pertaining to the original inhabitants of a region, having unique traditions, cultures, and ties to the land prior to colonization or annexation.