Myrna's personal residence (adjusted basis of $100,000)was condemned,and she received a condemnation award of $80,000.Myrna used the condemnation proceeds to purchase a new residence for $90,000.What is her 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.
E)None of these.

Question

Quizplus · Accepted Answer

Amount realized $ 80,000
Adjusted basis (100,000)
Realized loss ($20,000)
Recognized loss $ -0-
The loss on the condemnation of a personal residence is not recognized.The basis for Myrna's new residence is the cost of $90,000.

Myrna's Personal Residence (Adjusted Basis of $100,000)was Condemned,and She Received