Natural Power Corporation Owns a Warehouse with an Adjusted Basis

question 115

Multiple Choice

Natural Power Corporation owns a warehouse with an adjusted basis of $195,000 and an appraised fair market value of $185,000. The city of Springfield condemns the property for a new airport. The condemnation award is $185,000. Natural Power invests the $185,000 in a new warehouse on the other side of the city. What is the gain or loss that Natural Power Corporation must recognize due to the transactions?

• A)No gain or loss
• B)$10,000 gain
• C)$10,000 loss
• D)$185,000 gain