Evelyn's Office Building Is Destroyed by Fire on July 12,2016

question 117

Essay

Evelyn's office building is destroyed by fire on July 12,2016.The adjusted basis is $315,000.She receives insurance proceeds of $350,000 on August 31,2016.Calculate the amount that Evelyn must reinvest in qualifying property in order that her recognized gain be $20,000.Assume she elects § 1033 (nonrecognition of gain from an involuntary conversion)postponement treatment.

---

Definitions:

Pepsinogen

An inactive precursor of pepsin, secreted by the stomach lining; it is converted to pepsin in the presence of stomach acid to digest proteins.

Bile

A digestive fluid produced by the liver and stored in the gallbladder, important for the breakdown and absorption of fats.

Trypsin

A pancreatic enzyme that digests polypeptides to short peptides.

Chymotrypsin

A digestive enzyme that breaks down proteins in the small intestine into smaller peptides.