Lucinda, a Calendar Year Taxpayer, Owned a Rental Property with an Adjusted

question 246

Essay

Lucinda, a calendar year taxpayer, owned a rental property with an adjusted basis of $312,000 in a major coastal city. Her property was condemned by the city government on October 12, 2018. In order to build a convention center, Lucinda eventually received qualified replacement property from the city government on March 9, 2019. This new property has a fair market value of $410,000.
a. What is Lucinda's recognized gain or loss on the condemnation?
b. What is her adjusted basis for the new property?
c. If, instead of receiving qualifying replacement property, Lucinda was paid $410,000, what is the latest date that she can acquire qualifying replacement property?

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