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

question 25

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, 2017. Sam is a calendar year taxpayer. He receives a condemnation award of $875,000 on March 1, 2018. He builds a new office building at a cost of $845,000 which is completed and paid for on December 31, 2020. 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 the above.

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Definitions:

Financial Problems

Difficulties related to managing money, such as debt accumulation or inability to cover expenses.

Elder Abuse

A form of mistreatment that results in harm or loss to older individuals, encompassing physical, emotional, financial, or sexual abuse, as well as neglect.

Stress

A physical, mental, or emotional strain or tension resulting from adverse or demanding circumstances.

Victims of Violence

Individuals who have suffered harm, either physically or emotionally, as a result of violent acts or behaviors.