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A Fire Destroys David's Business Building That Cost $200,000 in 2005

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A fire destroys David's business building that cost $200,000 in 2005 and had an adjusted basis of $160,000. David's insurance company reimburses him $250,000 for his loss. David promptly reconstructs the building for $230,000.
a.What is the amount and the character of David's minimum recognized gain (loss)?
b.What is the basis of David's new building?

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a. David must recognize an unrecaptured ...

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