SAMUEL'S HOME WAS DESTROYED BY A TORNADO. HE HAD PURCHASED THE HOME 20 MONTHS AGO FOR $875,000. HE RECEIVED $1,250,000 FROM HIS INSURANCE COMPANY TO REPLACE THE HOME. IF HE FAILS ΤΟ REBUILD THE HOME OR ACQUIRE A REPLACEMENT HOME IN THE REQUIRED TIME, HOW MUCH GAIN MUST HE RECOGNIZE ON THIS CONVERSION? A. $375,000 B. $160,000 C. $125,000 D. $0 E. NONE OF THE ABOVE
SAMUEL'S HOME WAS DESTROYED BY A TORNADO. HE HAD PURCHASED THE HOME 20 MONTHS AGO FOR $875,000. HE RECEIVED $1,250,000 FROM HIS INSURANCE COMPANY TO REPLACE THE HOME. IF HE FAILS ΤΟ REBUILD THE HOME OR ACQUIRE A REPLACEMENT HOME IN THE REQUIRED TIME, HOW MUCH GAIN MUST HE RECOGNIZE ON THIS CONVERSION? A. $375,000 B. $160,000 C. $125,000 D. $0 E. NONE OF THE ABOVE
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 4BCRQ
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Transcribed Image Text:SAMUEL'S HOME WAS DESTROYED BY A TORNADO. HE
HAD PURCHASED THE HOME 20 MONTHS AGO FOR
$875,000. HE RECEIVED $1,250,000 FROM HIS
INSURANCE COMPANY TO REPLACE THE HOME. IF HE
FAILS ΤΟ REBUILD THE HOME OR ACQUIRE A
REPLACEMENT HOME IN THE REQUIRED TIME, HOW
MUCH GAIN MUST HE RECOGNIZE ON THIS
CONVERSION?
A.
$375,000
B. $160,000
C.
$125,000
D.
$0
E.
NONE OF THE ABOVE
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