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A Flood Destroys Owen's Building That Cost $100,000 in 2007

Question 11

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A flood destroys Owen's building that cost $100,000 in 2007, which has an adjusted basis of $80,000. Owen's insurance company reimburses him $125,000 for his loss. Owen promptly reconstructs the building for $115,000. What is the minimum amount of gain that Owen must recognize and his basis in the new building? A flood destroys Owen's building that cost $100,000 in 2007, which has an adjusted basis of $80,000. Owen's insurance company reimburses him $125,000 for his loss. Owen promptly reconstructs the building for $115,000. What is the minimum amount of gain that Owen must recognize and his basis in the new building?

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