Cragin’s manufacturing facility had an adjusted basis of $7,600,000: $2,000,000 for the land and $5,600,000 for the building when destroyed by fire. It received $7,000,000 from its insurance company to replace the building, and it sold the land for $2,800,000. How much must Cragin invest in a new facility to defer all of its gain?
a. $7,000,000
b. $7,600,000
c. $9,000,000
d. $9,800,000