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

question 2

Multiple Choice

A barn with an adjusted basis of $125,000 was destroyed by a tornado on March 5,2014.On May 15,2014,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:

Food Preference

An individual's inclination or desire to select certain types of food over others based on taste, health, culture, or other factors.

Genetic Basis

The underlying foundation of traits and diseases in organisms, determined by genes and their interaction with the environment.

Imprinting

A process occurring early in an animal's life where it forms attachments and develops a concept of its own identity based on its environment and interactions.

Suitable Mate

An individual chosen for reproduction based on genetic compatibility and traits deemed beneficial for offspring.