Jared,a fiscal year taxpayer with an August 31st year-end,owns an office building (adjusted basis of $800,000)that was destroyed by fire on December 24,2014.If the insurance settlement was $950,000 (received March 1,2015),what is the latest date that Jared can replace the office building in order to qualify for § 1033 nonrecognition of gain?
A)December 31,2014.
B)August 31,2015.
C)December 31,2016.
D)August 31,2017.
E)None of these.

Question

Quizplus · Accepted Answer

Gain of $150,000 ($950,000 amount received - $800,000 adjusted basis)is realized on March 1,2015.As Jared has two years from the close of that tax year (August 31,2015)to replace the property,the latest replacement date is August 31,2017.

Jared,a Fiscal Year Taxpayer with an August 31st Year-End,owns an Office