Patty's factory building,which has an adjusted basis of $475,000,is destroyed by fire on April 8,2013.Insurance proceeds of $500,000 are received on June 1,2013.She has a new factory building constructed for $490,000,which she occupies on October 1,2013.Assuming Patty's objective is to minimize the tax liability,calculate her recognized gain or loss and the basis of the new factory building.

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The Answer of Patty's factory building,which has an adjusted basis of $475,000,is destroyed by fire on April 8,2013.Insurance proceeds of $500,000 are received on June 1,2013.She has a new factory building constructed for $490,000,which she occupies on October 1,2013.Assuming Patty's objective is to minimize the tax liability,calculate her recognized gain or loss and the basis of the new factory building.

Patty's Factory Building,which Has an Adjusted Basis of $475,000,is Destroyed