Ray Rambler's Office Building with a Basis of $75,000 Was

question 51

True/False

Ray Rambler's office building with a basis of $75,000 was condemned by the county which paid him $120,000 as compensation. He purchased a new new office one year later for $105,000. Ray is entitled to postpone all of the $45,000 realized gain.

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Definitions:

Economic Life

The expected period during which an asset remains useful to a particular entity or project, often affecting its depreciation schedules.

Business Entity

An organization established as a separate legal entity for the purposes of conducting business, such as a corporation, partnership, or sole proprietorship.

Time Periods

Specific intervals or durations used for accounting and reporting purposes, such as fiscal quarters or years.

Bank Loan

A sum of money lent by a bank to a borrower at an agreed interest rate.