Reid Had a Business Building Destroyed in a Fire

question 95

Essay

Reid had a business building destroyed in a fire. The old building was purchased for $375,000 and $60,000 of depreciation deductions had been taken. Although the old building had a fair market value of $425,000 at the time of the fire, his insurance proceeds were limited to $400,000. Reid found qualified replacement property which he acquired six months later for $390,000. What is the amount of Reid's realized gain and recognized gain?

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Definitions:

Europe

A continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere, known for its rich history, cultural heritage, and as a significant economic and political entity on the global stage.

International Trade Union Confederation

A global organization representing the interests of national trade union centers worldwide.

International Union Organization

An organization that represents the interests of workers across multiple countries, aiming to promote labor rights on an international scale.

Multidomestic Corporation

A company that operates in multiple countries, tailoring strategies and products to each specific market.