Williams Owned an Office Building (But Not the Land) That

question 97

Essay

Williams owned an office building (but not the land) that was destroyed by a fire. The building was insured and Williams has a $156,000 gain because his insurance recovery exceeded his adjusted basis for the building. Williams may replace the building. Williams had taken $145,000 of depreciation on the building, has no § 1231 lookback loss, has no other § 1231 transactions for the year, and has no Schedule D transactions for the year. What is the final nature of Jamison's gain for the year and what tax rate(s) apply to the gain if:
(a) He does reinvest the insurance proceeds?
(b) If he doesn't reinvest the insurance proceeds?

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Definitions:

Left Cerebral Hemisphere

The left cerebral hemisphere is the half of the human brain that is typically associated with analytical thought, language, and logic.

Posterior Cerebral Hemisphere

Refers to the back portion of the cerebral hemisphere, responsible for processing visual and spatial information.

Central Cerebral Hemisphere

The left and right hemispheres of the brain, responsible for various cognitive, sensory, and motor functions.

Right Cerebral Hemisphere

The half of the brain that is typically associated with creativity, spatial ability, visual imagery, and the processing of music and nonverbal content.