In January 2014, Karen Sparks purchased land with a building situated on it for $320,000. It was determined that the building accounts for 62.5 percent of the FMS of the property and the land for the other 37.5 percent. Karen immediately began using the land and building in her business, which she operates as a sole proprietorship. On September 1, 2016, the building was completely destroyed in a fire. She received insurance proceeds of $500,000 on September, 21 2016. She built a new building on the land and used it for the same purpose. The new building cost $480,000. She began using it on December 22, 2016. She wants to defer as much gain as possible.

Based on this information, determine the following:

a. The initial basis in the land and in the original building.

b. The depreciation on the building for the years 2014 2016.

c. The adjusted basis in the building at the time of the fire.

d. Realized gain/loss on the involuntary conversion of the building.

e.Recognized gain/loss on the involuntary conversion of the building.

f. The adjusted basis in the new building.