A Barn with an Adjusted Basis of $125,000 Was Destroyed

question 30

Multiple Choice

A barn with an adjusted basis of $125,000 was destroyed by a tornado on March 5,2017.On May 15,2017,the insurance company paid the owner $150,000.The owner reinvested $170,000 in another barn.What is the basis of the new barn if non-recognition of gain from an involuntary conversion is elected?

• A)$0.
• B)$120,000.
• C)$145,000.
• D)$170,000.

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Definitions:

Sample Size

The number of observations or data points selected from a population for the purpose of statistical analysis, which can influence the accuracy and reliability of results.

Normally Distributed

Describes a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Probability

A measure of the likelihood of occurrence of a particular event or outcome, often expressed as a number between 0 and 1.

NORM.DIST

A function in various statistical software that returns the normal distribution for a specified mean and standard deviation.