A Fire Completely Destroyed a Warehouse Owned by Della Company

Multiple Choice

A fire completely destroyed a warehouse owned by Della Company and used for nine years in its shipping business. Della's adjusted basis in the warehouse was $748,200, and its replacement value was $1 million. Unfortunately, the warehouse was uninsured. As a result of the destruction, Della recognizes:

A) $1 million ordinary loss
B) $748,200 ordinary loss
C) $748,200 Section 1231 loss
D) None of these choices are correct