A Factory Building Owned by Amber,Inc

question 96

Multiple Choice

A factory building owned by Amber,Inc.is destroyed by a hurricane.The adjusted basis of the building was $400,000 and the appraised value was $425,000.Amber receives insurance proceeds of $390,000.A factory building is constructed during the nine-month period after the hurricane at a cost of $450,000.What is the recognized gain or loss and what is the basis of the new factory building?

• A)$0 and $450,000.
• B)$0 and $460,000.
• C)($10,000)and $440,000.
• D)($10,000)and $450,000.
• E)None of these.

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Definitions:

Equalizing-beam Suspension

A type of vehicle suspension system that uses a central beam to distribute weight and balance between axles.

Walking Beam

A pivoting, tandem-axle suspension beam that maintains axle spacing and alignment while maximizing tire-to-road contact.

Torque Rods

Components in vehicle suspension systems that limit the axle's movement and help maintain alignment by absorbing stress and vibration.

Axle Windup

A term used in automotive mechanics referring to the torsional stress and deformation experienced by vehicle axles during acceleration or under heavy loads.