What will be the immediate tax consequences to T? What will be T's basis for the purpose of claiming depreciation on the new equipment? What would be the tax consequences to T if T made a quick change of plans and sold the newly acquired equipment for $26,000 before any depreciation became allowable with respect to it? Taxpayer, who is single, has lived in her principal residence for several years. Taxpayer purchased the home for $100,000 and it was worth $500,000 when it was destroyed in a fire. Taxpayer recovered $450,000 of insurance proceeds. Taxpayer wants to minimize the tax consequences with respect to the residence. What do you suggest that she do? See Reg. 1.121-4(d). Would the court have reached the same result in Harry G. Masser if a single piece of business property had been damaged and, even though the property could still have been used in the business, the owner of the property "in the exercise of good business judgment" decided, nevertheless, to sell it and use the sale and insurance proceeds to purchase a piece of replacement property? See C.G. Willis. Inc. v. Commissioner, 41 T.C: 468 (1964), affirmed per curiam