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Taxation: Condemnation award gains; replacement real property

William Stevenson sold his warehouse to a public utility for $24,000 under a threat of condemnation. He paid $25000 for the property and spent an addition $1000 for a new roof. He had claimed $3600 depreciation in conjunction with the condemnation award, Mr. Stevenson paid $201 in legal fee. Mr. Stevenson

A. Realize no gain on the property because of the condemnation
B. Recognize no gain on the property if within the replacement period, he pays $30,000 for a different warehouse
C. Recognize no gain on the property if within the replacement period, he pays $20,000 for a different warehouse
D. Realize no gain on the property if within the replacement period, he pays $20,000 for a different warehouse

The replacement period for condemned real property use in trade or business ends

A. 2 years after the end of the year in which the gain is realized
B. 4 years after the end of the year in which the gain is realized
C. 3 years after the end of the first year in which any gain is realized
D. 3 years after the date any gain is realized

Solution Preview

William Stevenson sold his warehouse to a public utility for $24,000 under a threat of condemnation. He paid $25000 for the property and spent an addition $1000 for a new roof. He had claimed $3600 depreciation in conjunction with the condemnation award, Mr. Stevenson paid $201 in legal fee. Mr. Stevenson

B. Recognize no gain on the property if within ...

Solution Summary

Condemnation award gains for replacement real property is examined.

$2.19