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

question 60

Essay

Evelyn's office building is destroyed by fire on July 12, 2017. The adjusted basis is $315,000. She receives insurance proceeds of $350,000 on August 31, 2017. 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.

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Definitions:

Straighten

To make something orderly or aligned; to correct from a bent or twisted position.

Ear Canal

The narrow tube through which sound waves travel from the outer ear to the eardrum.

Up And Back

A technique often used for administering ear drops or examining the ear, where the ear is pulled upward and backward to straighten the ear canal.

Macular Degeneration

A medical condition that results in blurred or no vision in the center of the visual field due to damage to the macula of the retina.