A Fire Destroyed Josh's Scuba Shop

question 89

Multiple Choice

A fire destroyed Josh's Scuba Shop. The business had an adjusted basis of $500,000 and a fair market value of $600,000. Josh received $550,000 from the insurance company and used the cash to go to Hawaii. I. Josh has a realized gain of $100,000. II. Josh has a recognized gain of $50,000.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements are correct.
• D) Neither statement is correct.

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Definitions:

Managers

Individuals responsible for planning, leading, organizing, and controlling a group or organization to achieve set objectives.

Grapevine

Informal communication that flows through an organization, often carrying rumors and unofficial information.

Videoconference Participants

Individuals or groups who actively engage in a meeting or event via video communication platforms, allowing for visual and audio interaction from different locations.

Pointers

In computing, pointers are variables that store memory addresses of other variables or memory locations.