Joyce's Office Building Was Destroyed in a Fire (Adjusted Basis

question 221

Multiple Choice

Joyce's office building was destroyed in a fire (adjusted basis of $350,000? fair market value of $400,000) . Of the insurance proceeds of $360,000 she receives, Joyce uses $310,000 to purchase additional inventory and invests the remaining $50,000 in short-term certificates of deposit. She received only $360,000 because of a co-insurance clause in her insurance policy. What is Joyce's recognized gain or loss?

• A) $0
• B) $10,000 loss
• C) $10,000 gain
• D) $40,000 gain
• E) None of the above

---

Definitions:

Respected

Being accorded honor or esteem; held in high regard.

Recognized

Acknowledged or identified as having value, significance, or as meeting certain standards.

Aggressive Behavior

Actions characterized by hostility or violence intended to dominate or intimidate another person.

Quiet Section

A designated area or period intended for silence or significantly reduced noise levels.