Gabe's Office Building (Adjusted Basis of $430,000; Fair Market Value

True/False

Gabe's office building (adjusted basis of $430,000; fair market value of $500,000) is destroyed by a hurricane.Due to a 20% co-insurance clause, Gabe receives insurance proceeds of only $400,000.If Gabe purchases an office building for $500,000 one month later, its adjusted basis is $530,000 ($500,000 cost + $30,000 postponed loss).