On June 5, 2018, Brown, Inc., a calendar year taxpayer, receives cash of $778,500 from the county upon condemnation of its warehouse building (adjusted basis of $544,950 and fair market value of $778,500).

b. Complete the statements below regarding what must Brown do to qualify for 1033 postponement if the adjusted basis was instead $934,200.

Because Brown has a realized gain/loss on the condemnation of business property, it is automatically recognized/automatically defered/ elect to defer recognition . In this case, 1033 does not modify/modify the normal rules of recognition. Therefore, Brown has a realized gain/loss of $_______ of which $_______ is recognized.