Joyce's Office Building Was Destroyed in a Fire (Adjusted Basis

question 221

Multiple Choice

Joyce's office building was destroyed in a fire (adjusted basis of $350,000? fair market value of $400,000) . Of the insurance proceeds of $360,000 she receives, Joyce uses $310,000 to purchase additional inventory and invests the remaining $50,000 in short-term certificates of deposit. She received only $360,000 because of a co-insurance clause in her insurance policy. What is Joyce's recognized gain or loss?

• A) $0
• B) $10,000 loss
• C) $10,000 gain
• D) $40,000 gain
• E) None of the above

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Definitions:

Genetic Drift

A mechanism of evolution that refers to random changes in the frequency of alleles within a population over time.

Random Chance

The occurrence of events without a determinable cause, often affecting genetic variations and evolutionary processes in organisms.

Natural Selection

A process in evolutionary biology where organisms with traits better adapted to the environment have higher survival rates and reproductive success, leading to the accumulation of beneficial traits in a population over generations.

Homoplasic Traits

Homoplasic traits are similar features in organisms that evolved independently, not from a common ancestor, often due to convergent evolution or parallel evolution.