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

Short Answer

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?
$$\begin{array} { l l l } & { \text { Recognized } } & \text { New } \\& \underline { \text { Gain } }& \underline { \text { Basis }} \\\text { a. } & \$ - 0 - & \$ 80,000 \\\text { b. } & \$ - 0 - & \$ 115,000 \\\text { c. } & \$ 10,000 & \$ 80,000 \\\text { d. } & \$ 10,000 & \$ 115,000 \\\text { e. } & \$ 10,000 & \$ 150,000\end{array}$$