On August 20, 2018, the Offices of Cobb Company, a Calendar-Year

Essay

On August 20, 2018, the offices of Cobb Company, a calendar-year taxpayer, were destroyed by a tornado. The building had a fair market value before the tornado of $1,200,000 and a basis of $675,000. Cobb Company received $1,200,000 from its insurance company on December 10, 2018 to make repairs or replace the building. On January 2, 2021, Cobb Company finally invests $1,100,000 in a qualifying replacement building. What is Cobb's realized and recognized gain or loss on this involuntary conversion.