Kareem's office building is destroyed by fire on April 11,2013.Settlement is reached with the insurance company on November 1,2013 when he receives a check for $900,000.The property had recently been appraised for $920,000.Kareem's adjusted basis in the building was $800,000.
a.What is Kareem's realized gain or loss?
b.Assume Kareem wishes to defer the maximum amount of gain.Indicate:
c.Assume that instead of a fire,the state forces Kareem to sell the property.Indicate how your responses to part b would differ.

Question

Kareem's office building is destroyed by fire on April 11,2013.Settlement is reached with the insurance company on November 1,2013 when he receives a check for $900,000.The property had recently been appraised for $920,000.Kareem's adjusted basis in the building was $800,000.
a.What is Kareem's realized gain or loss?
b.Assume Kareem wishes to defer the maximum amount of gain.Indicate:
  c.Assume that instead of a fire,the state forces Kareem to sell the property.Indicate how your responses to part b would differ.

Quizplus · Accepted Answer

The Answer of Kareem's office building is destroyed by fire on April 11,2013.Settlement is reached with the insurance company on November 1,2013 when he receives a check for $900,000.The property had recently been appraised for $920,000.Kareem's adjusted basis in the building was $800,000.
a.What is Kareem's realized gain or loss?
b.Assume Kareem wishes to defer the maximum amount of gain.Indicate:
  c.Assume that instead of a fire,the state forces Kareem to sell the property.Indicate how your responses to part b would differ.

Kareem's Office Building Is Destroyed by Fire on April 11,2013