13. Alice owns an apartment complex with an adjusted basis of $305,000. A flood occurs on...

80.2K

Verified Solution

Question

Accounting

13. Alice owns an apartment complex with an adjusted basis of$305,000. A flood occurs on a property, and the insurance policyreimburses Alice $500,000 for the loss. The transaction may betaxable as follows (circle as many as apply – more than one iscorrect):
A. Gain of $195,000 on the sale of the asset.
B. No taxable gain if $900,000 is reinvested into othercommercial property owned within two years after the insurance isreceived.
C. No taxable gain if $305,000 is reinvested into othercommercial property owned within two years after the insurance isreceived.
D No taxable gain if $700,000 is reinvested into anotherapartment complex within two years after the insurance isreceived.
E No taxable gain if $305,000 is reinvested to repair theexisting apartment complex
15. An installment sale:
A. Can defer the recognition of a loss on the sale of realestate.
B. Applies only when a payment is received after the close of thetax year in which the sale occurs.
C. Must be applied in all situations when a payment is receivedafter year end.
D. Can only be used for new construction.
E. All of the above.

Answer & Explanation Solved by verified expert

4.4 Ratings (817 Votes)

13 Treatment of reimbursement received against a loss of property due to damage disaster or theft is covered under Publication 547 of IRS As per current IRS regulation if you receive a reimbursement amount higher than your adjusted basis of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member