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

question 6

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 30,2014.Sam is a calendar year taxpayer.He receives a condemnation award of $875,000 on March 1,2015.He builds a new office building at a cost of $845,000 which is completed and paid for on December 31,2017.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 these.

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Definitions:

Response of Interest

The specific reaction or outcome measured in a research study to evaluate the effects of various conditions or treatments.

Conditioning

The process of learning through association, where a response becomes more frequent or predictable in a given environment due to reinforcement.

Salivating

The act of producing saliva in the mouth, often triggered by the anticipation of food or the presence of certain stimuli.

Laboratory Dogs

Research animals, particularly dogs, used for scientific experiments to study disease, drug effects, and other biological processes.