Ron's building,which was used in his business,was destroyed in a fire.Ron's adjusted basis in the building was $210,000,and its FMV was $330,000.Ron filed an insurance claim and was reimbursed $300,000.In that same year,Ron invested $240,000 of the insurance proceeds in another business building.Ron will recognize gain of
A)$0.
B)$30,000.
C)$60,000.
D)$90,000.

Question

Quizplus · Accepted Answer

Ron received $300,000 from insurance, which is $90,000 more than his adjusted basis of $210,000, resulting in a realized gain of $90,000. However, he reinvested $240,000 in a new building, deferring $60,000 of the gain. Therefore, he recognizes a gain of $30,000 ($90,000 realized gain - $60,000 deferred gain).

Ron's Building,which Was Used in His Business,was Destroyed in a Fire.Ron's