Question
Encino Plaza, Inc. owns a 50-acre shopping strip in Encino, California. In January 1994, an earthquake hit the area and destroyed parts of the shopping
Encino Plaza, Inc. owns a 50-acre shopping strip in Encino, California. In January 1994, an earthquake hit the area and destroyed parts of the shopping center. Some relevant information include the following:
| Asset | Basis | FMV Before | FMV After | Insurance Recovery |
| Building | $90,000 | $70,000 | $0 | $70,000 |
| Equipment | $40,000 | $50,000 | $0 | $25,000 |
| Parking Structure | $90,000 | $120,000 | $70,000 | $25,000 |
Because of the extensive damage caused by the earthquake, the President of the U.S. designated the area as a disaster area. Encino Plaza Inc. had $90,000 of taxable income last year. The companys taxable income for the current year, excluding the loss from the earthquake, is $220,000. Determine the amount of the corporations loss and the year in which it should take the loss.
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Accounting for Governmental and Nonprofit Entities
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
16th Edition
78110939, 978-0078110931
