during the 2020 taxation year the hurley company losses its only building (non residential) in a fire. original cost was 1,200,000, its fair market value was 1,555,000 and its class 1 UCC was 754,828. the company received 1,500,000 of insurance proceeds in 2020 and replaces it with a new building at a cost of 1,600,000 in 2021. the company doesnt know if they qualify for a ita elections but would like to use whatever tax saving provisions are available to them.

calculate and explain the full tax consequences in both 2020 and 2021