Teresa's manufacturing plant is destroyed by fire. the plant has an adjusted basis of $270,000, and teresa receives insurance proceeds of $410,000 for the loss. teresa reinvests $420,000 in a replacement plant within 2 years of receiving the insurance proceeds. a.) calculate teresa’s recognized gain if she elects to utilize the involuntary conversion provision.

b.) calculate teresa’s basis in the new plant.

Please find the detailed answer as follows:

Explanation:

Step 1. Given information.

Step 2. Calculation.

a) A realized gain on the involuntary conversion of property occurs when the taxpayer receive the proceeds in excess of his or her adjusted basis.

involuntary conversion gain is not recognized if the proceeds or payments are reinvested in qualified replacement property within the required time period and the taxpayer makes the proper election.

Involuntary conversion gain = $ 410000- $ 270000 = $ 140000, which is not to be recongnized as the same is reinvested in the replacement of the asset.

b) Teresa's basis in the new plant :-

$ 270000-$410000+$420000= $280000.

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is this good enough?

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.