How much gain is recognized by paul

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Problem 1: Real property where Paul Peterson's warehouse is located is condemned by the public authorities on November 23, 2019. Paul purchased the warehouse in 2011 for $800,000, and the warehouse had and adjusted basis of $420,000 and a fair market value of $1 million. He receives $1 million from the public authorities on March 5, 2020. Paul reinvests $950,000 in qualified replacement property. How much gain is recognized by Paul?

a. $420,000.

b. $50,000.

c. $580,000.

d. $1,000,000.

e. $950,000

Reference no: EM132879473

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