I:12-35 Involuntary Conversion. Duke Corporation owns an office building with a $400,000 adjusted basis. The building is destroyed by a tornado. The insurance company paid

$750,000 as compensation for the loss. Eight months after the loss, Duke uses the insurance proceeds and other funds to acquire a new office building for $682,000 and machinery for one of the company’s plants at a $90,000 cost. Assuming that Duke elects to defer as much of the gain as possible, what is the recognized gain, the basis for the new office building, and the basis for the machinery acquired?