A Barn with an Adjusted Basis of $125,000 Was Destroyed

Multiple Choice

A barn with an adjusted basis of $125,000 was destroyed by a tornado on March 5, 2015. On May 15, 2015, the insurance company paid the owner $150,000. The owner reinvested $170,000 in another barn. What is the basis of the new barn if non-recognition of gain from an involuntary conversion is elected?

A) $0.
B) $120,000.
C) $145,000.
D) $170,000.