Juan Owned a Small Rental Property,which Was Condemned by the County

Multiple Choice

Juan owned a small rental property,which was condemned by the county to expand a local park.His adjusted basis in the property was $40,000 and he received a payment of $75,000 from the county.A year later he purchased a similar piece of real estate for $70,000.What is Juan's recognized gain on the involuntary conversion of his rental property?

A) 0
B) $5,000
C) $10,000
D) $30,000
E) $35,000