Edith's Manufacturing Plant Is Destroyed by Fire on the Afternoon

question 61

Essay

Edith's manufacturing plant is destroyed by fire on the afternoon of November 3,2014.The adjusted basis is $800,000.The insurance company offers a settlement of $700,000.After protracted negotiations,Edith receives $825,000 on June 9,2015.Edith is a fiscal year taxpayer whose tax year ends on June 30th.What is the latest date that Edith can invest the proceeds in qualifying replacement property and elect to defer the gain under § 1033?

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Definitions:

Picking

Retrieving materials from storage and bringing them to manufacturing to fulfill a production order, or retrieving finished goods from storage and preparing them for shipment to fulfill a customer order.

Quality Inspection

An evaluative process where products or services are examined and tested to ensure they meet specified standards and requirements before being delivered to customers.

Logistics Functions

Activities involved in the movement and storage of goods from point of origin to point of consumption, including transportation, warehousing, and inventory management.

Transportation Management

The planning, execution, and optimization of the physical movement of goods, ensuring the efficient transit of products from origin to destination.