Carrie Owns a Business Building with an Adjusted Basis of $95,000

question 22

Multiple Choice

Carrie owns a business building with an adjusted basis of $95,000 and an appraised fair market value of $98,000. The city of Millerville condemns the property for a new highway. The condemnation award is $98,000. Carrie invests $90,000 of the proceeds into a new building on the other side of the city. What is the gain or loss that Carrie must recognize due to the transactions?

• A)No gain or loss
• B)$3,000 gain
• C)$3,000 loss
• D)$8,000 gain
• E)$5,000 loss

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Definitions:

Reinforce

The act of strengthening or encouraging a behavior, skill, or belief through various forms of feedback and rewards.

Managers Build

The process by which managers create or enhance structures, teams, and relationships within organizations to achieve goals and improve performance.

External Adaptation

Refers to how organizations adjust and respond to changes in their external environment to ensure survival and growth.

Internal Integration

The process within organizations of combining and coordinating the efforts and resources of different departments or units to achieve unity of effort and consistent objectives.