An apartment complex owned by H, a calendar year individual taxpayer, was destroyed in a landslide on January 12, 19X6.The apartments (including the land) had cost $600,000 and had an adjusted basis of $250,000.The insurance company paid $445,000 for the land and damaged buildings on March 12, 19X6.Which of the following is not necessarily true?
A)To be eligible for deferral, H must purchase other real estate to be used as rental property.
B)To be eligible for deferral, H must reinvest by March 12, 19X8.
C)In order to avoid recognizing any gain on this insurance settlement, H must reinvest at least $445,000.
D)Even if H reinvests, the $195,000 gain can be recognized, and the basis in the replacement will be its full cost.

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The Answer of An apartment complex owned by H, a calendar year individual taxpayer, was destroyed in a landslide on January 12, 19X6.The apartments (including the land) had cost $600,000 and had an adjusted basis of $250,000.The insurance company paid $445,000 for the land and damaged buildings on March 12, 19X6.Which of the following is not necessarily true?
A)To be eligible for deferral, H must purchase other real estate to be used as rental property.
B)To be eligible for deferral, H must reinvest by March 12, 19X8.
C)In order to avoid recognizing any gain on this insurance settlement, H must reinvest at least $445,000.
D)Even if H reinvests, the $195,000 gain can be recognized, and the basis in the replacement will be its full cost.

An Apartment Complex Owned by H, a Calendar Year Individual