Natural Power Corporation Owns a Warehouse with an Adjusted Basis

Multiple Choice

Natural Power Corporation owns a warehouse with an adjusted basis of $195,000 and an appraised fair market value of $185,000. The city of Springfield condemns the property for a new airport. The condemnation award is $185,000. Natural Power invests the $185,000 in a new warehouse on the other side of the city. What is the gain or loss that Natural Power Corporation must recognize due to the transactions?

A) No gain or loss
B) $10,000 gain
C) $10,000 loss
D) $185,000 gain