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?

---

Definitions:

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space when these events occur with a known constant mean rate and independently of the time since the last event.

Poisson Random Variable

Reflects the number of times a specified event occurs within a fixed interval, assuming events occur independently and at a constant rate.

Poisson Probabilities

The probability distribution that measures the probability of a given number of events happening in a fixed interval of time or space, assuming these events occur with a known constant mean rate and independently of the time since the last event.

Classified Department

A division within an organization or publication that deals with categorized or sorted information, often in the context of classified ads or internal classification.