Kristi Had a Business Building Destroyed in an Earthquake

question 6

Essay

Kristi had a business building destroyed in an earthquake. The old building was purchased for $257,500, and $81,500 of depreciation deductions had been taken. Her insurance proceeds were $553,750. 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 $621,500. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

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Definitions:

Workplace Governance

The system by which workplaces are directed and controlled, involving the mechanisms, processes, and relations by which control is exercised and accountability is rendered.

Government Intervention

Involves actions taken by a government to affect the economy, social issues, or other areas of public policy.

Occupy Movement

A global protest movement against economic inequality, social injustice, and the undue influence of corporations on government that gained prominence in 2011.

Critical Industrial Relations

An analytical approach focusing on power dynamics, the conflicts between capital and labor, and the role of government policies in shaping the work environment and relationships.