Joyce's Office Building Was Destroyed in a Fire (Adjusted Basis

Multiple Choice

Joyce's office building was destroyed in a fire (adjusted basis of $350,000; fair market value of $400,000) .Of the insurance proceeds of $360,000 she receives, Joyce uses $310,000 to purchase additional inventory and invests the remaining $50,000 in short-term certificates of deposit.She received only $360,000 because of a co-insurance clause in her insurance policy.What is Joyce's recognized gain or loss?

A) $0
B) $10,000 loss
C) $10,000 gain
D) $40,000 gain