Clayton Corporation owns business realty that the county condemns on July 15, year 1.The county pays Clayton $400,000 for the property that has an allocated basis of $235,000.

a. What is Clayton’s realized and recognized gain, assuming it does not replace the property?

b. What is its recognized gain, assuming it spends $350,000 on replacement property?

c. What is its basis in the replacement property?

d. What is its recognized gain, assuming it spends $500,000 on replacement property?

e. What is its basis in the replacement property?

f. If the corporation has a June 30 fiscal year-end, what is the last date that it can acquire qualifying replacement property?

AppendixLO1