A Barn with an Adjusted Basis of $125,000 Was Destroyed

question 34

Multiple Choice

A barn with an adjusted basis of $125,000 was destroyed by a tornado on March 5,2016.On May 15,2016,the insurance company paid the owner $150,000.The owner reinvested $170,000 in another barn.What is the basis of the new barn if non-recognition of gain from an involuntary conversion is elected?

• A)$120,000.
• B)$145,000.
• C)$0.
• D)$170,000.

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Definitions:

Retrograde Amnesia

A loss of memory-access to events that occurred, or information that was learned, before an injury or the onset of a disease.

Explicit Memory

Memory in which there is conscious recall of facts and events.

Episodic Memory

A subtype of long-term memory that involves the recollection of specific events, situations, and experiences, including their contexts and associated emotions.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is initially elicited by the second stimulus is eventually elicited by the first stimulus alone.