A Warehouse Used by Dirk Dumont in His Business Was

question 68

Multiple Choice

A warehouse used by Dirk Dumont in his business was condemned by the state. fte fair market value of the warehouse was $300,000; however, the state only awarded Dirk $250,000. Dirk's adjusted basis in the warehouse was $100,000. Dirk spent $75,000 to renovate an old barn that he owned in order to convert it to a warehouse, and he also purchased a new warehouse for $125,000. Both warehouses will be used to house the equipment previously held in the state condemned warehouse. What amount should Dirk report as gain or loss on the condemnation if an election is made under Code Sec. 1033?

• A) ($100,000)
• B) ($50,000)
• C) $0
• D) $50,000
• E) $100,000

---

Definitions:

Digital Networking

The use of online platforms and technologies to build, maintain, and enhance professional and social connections.

Online Presence

The visibility and engagement of an individual or organization across digital platforms, including websites and social media, influencing their reputation and reach.

Organization's Products

The goods or services produced and offered by a business or entity.

Company's Development

The process of growing or improving a company through expansion, innovation, or increasing its market presence.