Exercise 13-39 (Algorithmic) (LO. 7) On February 24, 2021, Allison's building, with an adjusted basis of $3,359,700 (and used in her trade or business), is destroyed by fire. On March 31, 2021, she receives an insurance reimbursement of $4,367,610 for the loss. Allison invests $3,930,849 in a new building and buys stock with the balance of insurance proceeds. Allison is a calendar year taxpayer. a. By what date must Allison make the new investment to qualify for the nonrecognition election? December 31, 2023 b. Assuming that the replacement property qualifies as similar or related in service or use, what are Allison's realized gain, recognized gain, and basis in the replacement building? Allison's realized gain is $ X and recognized gain is $ X. Her basis in the new building is X. Feedback Check My Work Section 1033 provides that a taxpayer who suffers an involuntary conversion of property may postpone recognition of gain realized from the conversion. Nonrecognition of gain can be either mandatory or elective, depending on whether the conversion is direct into replacement property) or indirect (into money)