Kareem's Office Building Is Destroyed by Fire on April 11

Essay

Kareem's office building is destroyed by fire on April 11, 2014. Settlement is reached with the insurance company on November 1, 2014 when he receives a check for $900,000. The property had recently been appraised for $920,000. Kareem's adjusted basis in the building was $800,000.
a. What is Kareem's realized gain or loss?
b. Assume Kareem wishes to defer the maximum amount of gain. Indicate:
c. Assume that instead of a fire, the state forces Kareem to sell the property. Indicate how your responses to part b would differ.