Alyssa's personal residence (adjusted basis of $100,000) was condemned, and she received a condemnation award of $80,000.Alyssa used the condemnation proceeds to purchase a new residence for $90,000.What is Alyssa's recognized gain or loss and her basis in the new residence?
A)$0; $70,000.
B)$0; $90,000.
C)($20,000); $90,000.
D)($20,000); $70,000.

Question

Quizplus · Accepted Answer

Alyssa does not recognize any gain or loss because the entire condemnation award was reinvested in a new residence, which is a qualifying replacement property. Her basis in the new residence is the cost of the new residence, $90,000.

Alyssa's Personal Residence (Adjusted Basis of $100,000) Was Condemned, and She