A Flood Destroys Owen's Building That Cost $100,000 in 2007,which

question 117

Short Answer

A flood destroys Owen's building that cost $100,000 in 2007,which has an adjusted basis of $80,000.Owen's insurance company reimburses him $125,000 for his loss.Owen promptly reconstructs the building for $115,000.What is the minimum amount of gain that Owen must recognize and his basis in the new building?
$$\begin{array} { l l l } & { \text { Recognized } } & \text { New } \\& \underline { \text { Gain } }& \underline { \text { Basis }} \\\text { a. } & \$ - 0 - & \$ 80,000 \\\text { b. } & \$ - 0 - & \$ 115,000 \\\text { c. } & \$ 10,000 & \$ 80,000 \\\text { d. } & \$ 10,000 & \$ 115,000 \\\text { e. } & \$ 10,000 & \$ 150,000\end{array}$$

Comprehend the structure and types of taxes in the U.S., including Social Security, excise, income, and sales taxes.

Recognize the growth in government roles over the years and the key factors contributing to this trend.

Identify the main sources of federal and state tax revenue and their significance.

Understand the budget preparation process within the federal government, particularly the role of the Office of Management and Budget.

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Definitions:

Employment Law

The branch of law that deals with the rights and duties between employers and workers.

Sexual Harassment

In the employment context, the granting of job promotions or other benefits in return for sexual favors (quid pro quo harassment), or language or conduct that is so sexually offensive that it creates a hostile working environment (hostile environment harassment).

Wrongful Termination

The illegal firing of an employee in violation of federal or state laws, or breach of employment contract terms.

Disability Income

Financial compensation provided to individuals who are unable to work due to a disability.