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QUESTION
The Wholesale Dress Shop was destroyed by fire in January. The adjusted basis of the building was $150,000. In March, the insurance company paid...
The Wholesale Dress Shop was destroyed by fire in January. The adjusted basis of the building was $150,000. In March, the insurance company paid $140,000 to cover the loss. Shortly thereafter a new building for the shop was purchased for $200,000.
a. What is the Dress Shop's recognized gain or loss?
b. What is the basis of the new building?
