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

question 57

Short Answer

A warehouse with an adjusted basis of $125,000 was destroyed by a tornado on April 15,2017.On June 15,2017,the insurance company paid the owner $195,000.The owner reinvested $170,000 in a warehouse.What is the basis of the new warehouse if non-recognition of gain from an involuntary conversion is elected?

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Definitions:

Counter-Blocking Therapy

A treatment approach intended to counteract or neutralize the effects of another therapy, often used in reference to managing side effects.

Dysthymia

A persistent, mild depression lasting for a long period, often years.

Mild Bipolar Disorder

A less severe form of bipolar disorder characterized by less extreme mood swings between depression and mania.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance.