Sidney, a Calendar Year Taxpayer, Owns a Building (Adjusted Basis

question 68

True/False

Sidney, a calendar year taxpayer, owns a building (adjusted basis $450,000) in Columbus, OH, in which he conducts his retail computer sales business. The building is destroyed by fire on December 12, 2018, and two weeks later he receives insurance proceeds of $600,000. Due to family ties, Sidney decides to move to Columbia, SC. He reinvests all of the insurance proceeds in a building in Columbia where he opens a retail computer sales business on April 2,2019. By electing § 1033, Sidney has no recognized gain and a basis in the new building of $450,000 ($600,000 cost -$150,000 postponed gain).

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Definitions:

Blastocyst

A stage of early embryonic development in mammals; it is a structure formed about five days after fertilization, consisting of an inner cell mass, a fluid-filled cavity, and an outer layer of trophoblast cells.

Placenta

During pregnancy, an organ arises in the uterus, serving to deliver essential nutrients and oxygen to the developing baby, as well as clearing out the baby’s metabolic waste.

Endoderm

The innermost layer of cells or tissue of an embryo in early development that gives rise to the lining of the digestive and respiratory systems.

Rubella

A contagious viral disease, also known as German measles, that can cause severe birth defects if contracted by a pregnant woman.