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.

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Definitions:

Court Opinion

A formal statement issued by a court expressing the reasons and ruling on a particular case.

Dictum

A statement or comment made by a judge in a legal decision or ruling that is not essential to the case's outcome.

Appellate Court

A court that reviews and makes decisions on appeals made against decisions of lower courts, focusing on whether the law was applied correctly in the original case.

Affirm

To uphold the judgment of a lower court.