Bill Binkley's oﬃce building with a basis of $480,000 is condemned by the state. fte state awards him $600,000 and he then purchases a new oﬃce building for $520,000. What is Bill's recognized gain?
A) $80,000
B) $120,000
C) $40,000
D) $0

Question

Quizplus · Accepted Answer

Bill's realized gain is $120,000 but if he makes the election his recognized gain is $80,000 ($600,000 less
$520,000 cost of new property).

Bill Binkley's Oﬃce Building with a Basis of $480,000 Is