On June 5, 2020, Brown, Inc., a calendar year taxpayer, receives cash of $750,000 from the county upon condemnation of its warehouse building (adjusted basis of $500,000 and fair market value of $750,000). Complete the statements below regarding what must Brown do to qualify for § 1033 postponement if the adjusted basis was instead $795,000. Because Brown has a realized loss  on the condemnation of business property, it is automatically recognized . In this case, §1033 does not modify  the normal rules of recognition. Therefore, Brown has a realized loss  of $fill in the blank of which $fill in the blank is recognized.

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges
Section: Chapter Questions
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Exercise 13-37 (LO. 7)

On June 5, 2020, Brown, Inc., a calendar year taxpayer, receives cash of $750,000 from the county upon condemnation of its warehouse building (adjusted basis of $500,000 and fair market value of $750,000).

Complete the statements below regarding what must Brown do to qualify for § 1033 postponement if the adjusted basis was instead $795,000.

Because Brown has a realized loss  on the condemnation of business property, it is automatically recognized . In this case, §1033 does not modify  the normal rules of recognition. Therefore, Brown has a realized loss  of $fill in the blank of which $fill in the blank is recognized.

 
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