In March, a Flood Completely Destroyed Three Delivery Vans Owned

question 84

Multiple Choice

In March, a flood completely destroyed three delivery vans owned by Totle Inc. Totle's adjusted tax basis in the vans was $48,900. Totle received a $90,000 reimbursement from its property insurance company, and on September 8, it purchased one new delivery van for $70,000. Compute Totle's recognized gain or loss on the involuntary conversion and its tax basis in the new van.

• A) No recognized gain or loss; $48,900 basis in the van
• B) $20,000 recognized gain; $70,000 basis in the van
• C) $20,000 recognized gain; $48,900 basis in the van
• D) None of the above.

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Definitions:

Social Norms

Shared guidelines or rules within a group or society about how to behave, which can influence an individual's behavior.

Cultural Liabilities

Drawbacks or disadvantages associated with belonging to a certain culture, especially when interacting in a broader or different cultural context.

Propaganda

Information, especially of a biased or misleading nature, used to promote or publicize a particular political cause or point of view.

External Attribution

The process of attributing the cause of one's own or another's behavior to external factors or situations.