Question

A barn with an adjusted basis of $125,00 was destroyed by a tornado on March 5, 2013. On may 15, 2013, 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

Is the answer D?

9 years ago