Kristi Had a Business Building Destroyed in an Earthquake

question 85

Essay

Kristi had a business building destroyed in an earthquake. The old building was purchased for $252,500, and $80,500 of depreciation deductions had been taken. Her insurance proceeds were $551,250. 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 $620,500. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

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Definitions:

Teamwork Skills

Abilities that enable an individual to work effectively and collaboratively within a team environment.

Behavioural Skills

Personal attributes and specific behaviors that enable individuals to communicate effectively, collaborate, and successfully manage themselves and others.

Performance Outcomes

The results or achievements of an individual's or group's work, measured against goals or standards.

Affective Outcomes

Emotional responses or attitudes that result from participating in a learning or training program, which can influence motivation and engagement.