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.

Grasp how marketers strategically position products using functional theory to meet consumer needs.

Understand the concept of attitude formation and change in consumer behavior.

Identify the various hierarchies of effects and their applications in marketing strategies.

Distinguish between high and low involvement decision-making processes and their impact on consumer behavior.

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Definitions:

Reverse Stock Split

A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the total market capitalization.

Market Value

The current trading price for a service or asset in the open market.

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet, often compared to its market value to assess if it's under or overvalued.

Retained Earnings

The portion of a company's profit that is held back and not distributed to shareholders in order to reinvest in the business or pay off debt.