Juan Owned a Small Rental Property, Which Was Condemned by the County

Multiple Choice

Juan owned a small rental property, which was condemned by the county to expand a local park. His adjusted basis in the property was $40,000 and he received a payment of $75,000 from the county. A year later he purchased a similar piece of real estate for $70,000.
-Refer to the information in problem 39. What is Juan's basis in the replacement property?

A) $40,000
B) $45,000
C) $50,000
D) $70,000
E) $75,000