A Flood Destroyed a Business Asset Owned by Boochi Company

question 30

True/False

A flood destroyed a business asset owned by Boochi Company. Boochi's adjusted tax basis in the asset was $87,100. Six months after the flood, Boochi used its $100,000 insurance settlement to replace the asset. Boochi can recognize a $12,900 gain or it can elect to defer gain recognition.

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Definitions:

Class A

A range of IP addresses in networking designated for very large networks, with a default subnet mask of 255.0.0.0, supporting 16 million hosts on each of 128 networks.

Laser Printer

A type of printer that uses a laser beam and toner to produce high-quality text and graphics on paper.

Color Documents

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RG-59

A type of coax cable used in video networks.