9

Question 9 (1 point) Sarah's business property was condemned by the state for highway construction through the location of her business. The state awarded Sarah $250,000 for the property. Sarah's basis in the property was $140,000. Sarah relocated to another locale and purchased a qualified replacement property for $225,000 within the required time period. What is the correct statement describing the result of these transactions? Sarah has a realized and recognized gain of $110,000 and a $225,000 basis in her property Sarah has a realized gain of $110,000 but it is all deferred because she replaces the former property. Sarah has a realized gain of $110,000, a recognized gain of $25,000, and a basis of $140.000 in her replacement property. Sarah has a realized gain of $110,000, a recognized gain of $25,000, and a basis of $165,000 in her replacement property