Reid Had a Business Building Destroyed in a Fire

question 84

Essay

Reid had a business building destroyed in a fire. The old building was purchased for $375,750, and $58,500 of depreciation deductions had been taken. Although the old building had a fair market value of $424,925 at the time of the fire, his insurance proceeds were limited to $398,500. Reid found qualified replacement property that he acquired six months later for $389,250. What is the amount of Reid's realized gain and recognized gain?

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Definitions:

1863

The year during the American Civil War known for significant events such as the Emancipation Proclamation, which declared the freedom of slaves in Confederate states.

Confederate Conscription Act

Legislation passed by the Confederate States during the Civil War in 1862, requiring certain classes of citizens to serve in the army.

Exemption

A provision that frees an individual or entity from an obligation or requirement typically imposed on others.

White Men

Adult males of European descent, often referenced in discussions of racial, social, and political dynamics, especially in relation to privilege and power structures.