For each of the following involuntary conversions, indicate whether the property acquired qualifies as replacement property, any resulting recognized gain, and the basis for the property acquired. If an amount is zero, enter " 0 ". a. Krystal owns a warehouse that is destroyed by a tornado. The space in the warehouse was rented to various tenants. The adjusted basis was $470,000. Krystal uses all of the insurance proceeds of $700,000 to build a shopping mall in a neighboring community where no property has been damaged by tornadoes. The shopping mall is rented to various tenants. Feedback Check My Work b. Javier owns a warehouse that he uses in his business. The adjusted basis is $300,000. The warehouse is destroyed by fire. Because of economic conditions in the area, Javier decides not to rebuild the warehouse. Instead, he uses all of the insurance proceeds of $400,000 to build a warehouse to be used in his business in another state. c. Bailey's personal residence is condemned as part of a local government project to widen the highway from two lanes to four lanes. The adjusted basis is $170,000. Bailey uses all of the condemnation proceeds of $200,000 to purchase another personal residence. Feedback Check My Work d. Juanita owns a building that she uses in her retail business. The adjusted basis is $250,000. The building is destroyed by a hurricane. Because of an economic downturn in the area, caused by the closing of a military base, Juanita decides to rent space for her retail outlet rather than replace the building. She uses all of the insurance proceeds of $300,000 to buy a four-unit apartment building in another city. A real estate agent in that city will handle the rental of the apartments for her. e. Susan and Rick's personal residence is destroyed by a tornado. They had owned it for 15 months. The adjusted basis was $170,000. Because they would like to travel, they decide not to acquire a replacement residence. Instead, they invest all of the insurance proceeds of $200,000 in a duplex, which they rent to tenants. Feedback Check My Work f. Alec and Meghann's personal residence (adjusted basis of $245,000 ) is destroyed in a flood. They had owned it for 18 months. Of the insurance proceeds of $350,000, they reinvest $342,000 in a replacement residence four months later