Utilize the involuntary conversion provision

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Reference no: EM131059174

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.

a) Calculate Teresa’s recognized gain if she elects to utilize the involuntary conversion provision.

b) Calculate Teresa’s basis in the new plant.

Reference no: EM131059174

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Utilize the involuntary conversion provision : 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. Calculate Teresa’s recognized gain if s..

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