Using the information from Question 30, what is Oscar’s basis on his new building?

a. $130,000

b. $132,000

c. $140,000

d. $142,000

Question 30

Oscar owns a building that is destroyed in a hurricane. His adjusted basis in the building before the hurricane is $130,000. His insurance company pays him $140,000 and he immediately invests in a new building at a cost of $142,000. What is the amount of recognized gain or loss on the destruction of Oscar’s building?