LO.7 The state highway department condemns some of Cadens grazing land. The land cost Caden $40,000, and
Question:
LO.7 The state highway department condemns some of Caden’s grazing land. The land cost Caden $40,000, and the condemnation award is the land’s fair market value of
$200,000. Shortly after the condemnation, Caden buys replacement grazing land. What is his recognized gain if the replacement land costs:
a. $140,000?
b. $220,000?
c. $40,000?
d. What, if any, is the justification for deferring the recognition of gain on an involuntary conversion?
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Related Book For 
South Western Federal Taxation 2013 Individual Income Taxes
ISBN: 9781133189558
36th Edition
Authors: William Hoffman, James E. Smith
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