The City of Greenville Condemned 300 Acres of Kayla's Farmland

question 34

Multiple Choice

The City of Greenville condemned 300 acres of Kayla's farmland.Kayla's land was worth $250,000 and her basis was $62,500.In payment to Kayla,the city gave Kayla 500 acres of similar land.An appraisal indicated that the land Kayla received was worth $265,000.What is Kayla's recognized gain or loss on the involuntary conversion and what is her basis in the land received?

• A)$0 gain and $62,500 basis.
• B)$0 gain and $262,500 basis.
• C)$15,000 gain and $265,000 basis.
• D)$202,500 gain and $265,000 basis.

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Definitions:

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