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

question 94

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, 2012.Sam is a calendar year taxpayer.He receives a condemnation award of $875,000 on March 1, 2013.He builds a new office building at a cost of $845,000 which is completed and paid for on December 31, 2015.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:

Oxygen Tank

A storage vessel for oxygen, used in medical settings to deliver oxygen therapy to patients requiring respiratory support.

Venturi Mask

A medical device that delivers a known oxygen concentration to patients on controlled oxygen therapy.

Simple Face Mask

A basic type of facial mask used to deliver a fixed concentration of oxygen to the patient, typically featuring a lightweight design and adjustable straps.

Oxymizer

A device that increases the efficiency of oxygen delivery from a supply system to the patient, often used in chronic lung conditions.