Which of the following are qualified replacement properties for properties involuntarily converted? Explain.
a. The insurance proceeds from a warehouse destroyed by a fire are used to purchase a manufacturing plant. The warehouse and the plant are both used in the taxpayer’s manufacturing business.
b. Assume the same facts as in part a, except that the warehouse is held as an investment and rented out to businesses. The plant will also be rented out to a manufacturing business.
c. An office building used in a trade or business is condemned. The proceeds are used to buy an apartment complex that will be used as an investment activity.
d. The insurance proceeds from the destruction of a construction crane are used to buy a fleet of forklifts. The crane and the forklifts are used in the taxpayer’s construction business.
e. An antique vase is stolen from the lobby of a business. The insurance proceeds are used to buy a painting that is hung in the same lobby.