An Apartment Building with an Adjusted Basis of $500,000 Was

question 63

Multiple Choice

An apartment building with an adjusted basis of $500,000 was destroyed by a tornado on April 30,2017.On May 10,2017,the insurance company paid the owner $695,000.The owner reinvested $570,000 in a new apartment complex.What is the basis of the new complex if non-recognition of gain from an involuntary conversion is elected?

• A)$500,000.
• B)$570,000.
• C)$625,000.
• D)$695,000.