Sam's Office Building with an Adjusted Basis of $750,000 and a Fair

question 95

Multiple Choice

Sam's office building with an adjusted basis of $750,000 and a fair market value of $900,000 is condemned on November 30,2016.Sam is a calendar year taxpayer.He receives a condemnation award of $875,000 on March 1,2017.He builds a new office building at a cost of $845,000 which is completed and paid for on December 31,2019.What is Sam's recognized gain on receipt of the condemnation award and basis for the new office building assuming his objective is to minimize gain recognition?

• A)$0;$720,000.
• B)$30,000;$750,000.
• C)$30,000;$845,000.
• D)$150,000;$750,000.
• E)None of the above.

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Definitions:

Physical Immaturity

Describes a stage where an individual's body has not yet reached full development or maturity.

Biological Developments

Changes and growth in biological systems, often referring to the physical and physiological maturation of living organisms.

Semenarche

The first ejaculation. Ejaculation often occurs spontaneously during sleep, in which case it is called a nocturnal emission.

Homo Sapiens

The scientific term for modern humans, characterized by bipedalism and a large brain capacity compared to other primates.