The Wholesale Dress Shop was destroyed by fire in January.The adjusted basis of the building was $150,000.In March, the insurance company paid $140,000 to cover the loss.Shortly thereafter a new building for the shop was purchased for $200,000.

a. What is the Dress Shops recognized gain or loss?

What is the basis of the new building?

Treeline Industries receives a $50,000 dividend from a corporation in which it owns 35% of the stock.Treelines revenues, not including dividends, and operating expenses for the year are $400,000 and $375,000, respectively.

a. Compute Treelines taxable income.

b. How would your answer change if they only owned 10% of the stock in the corporation?

c. How, if at all, would your answer change if their revenues were $370,000 instead of $400,000, but they continued to own 35% of the corporate stock?