2. Milts building, which houses his retail sporting goods store, is destroyed by a flood. Sandras warehouse, which she is leasing to Milt to store the inventory of his business, also is destroyed in the same flood. Both Milt and Sandra receive insurance proceeds that result in a realized gain and they both intend to purchase replacement property within the required time period.

a. What type of replacement property must Milt find and why?

b. What type of replacement property must Sandra find and why?