Kristi Had a Business Building Destroyed in an Earthquake

question 31

Essay

Kristi had a business building destroyed in an earthquake. The old building was purchased for $259,500, and $81,900 of depreciation deductions had been taken. Her insurance proceeds were $554,750. Although the replacement property was much larger and nicer than her old building, Kristi's new property qualified as replacement property. She acquired the new property 13 months after the earthquake for $621,900. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

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Definitions:

Barista

A person who is trained in the preparation and serving of coffee and coffee-based drinks, often working in a coffee shop.

Camaraderie

A spirit of friendly good-fellowship and trust among a group of people.

Middle-of-the-road Behaviors

An approach or attitude that is moderate or average, avoiding extremes.

Authority Compliance Behaviors

Actions characterized by a focus on efficiency, control, and achieving tasks while maintaining strict adherence to rules and hierarchy.