Susan Short's Office Building Is Destroyed in a fiRe

question 25

Multiple Choice

Susan Short's office building is destroyed in a fire. fte adjusted basis in the building is $200,000 and its fair market value is $350,000. fte insurance company reimburses Susan $330,000 for its loss, and she immediately purchases a new office building for $310,000. What is Susan's recognized gain and adjusted basis in the new office building?

• A) $20,000 and $200,000, respectively.
• B) $0 and $310,000, respectively.
• C) $0 and $330,000, respectively.
• D) $20,000 and $310,000, respectively.
• E) None of the above.

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Definitions:

Important Announcement

An important announcement is a message that is crucial and needs to be communicated to a wide audience due to its significance.

Extemporaneous Delivery

A method of speaking where the delivery is improvised around a structured outline or notes, often appearing more natural and engaging.

Recollection

The action of remembering something.

Improvisation

The act of creating or performing spontaneously without prior preparation.