13. Alice owns an apartment complex with an adjusted basis of$305,000. A flood occurs on a property, and the insurance policyreimburses Alice $500,000 for the loss. The transaction may betaxable as follows (circle as many as apply – more than one iscorrect):
A. Gain of $195,000 on the sale of the asset.
B. No taxable gain if $900,000 is reinvested into othercommercial property owned within two years after the insurance isreceived.
C. No taxable gain if $305,000 is reinvested into othercommercial property owned within two years after the insurance isreceived.
D No taxable gain if $700,000 is reinvested into anotherapartment complex within two years after the insurance isreceived.
E No taxable gain if $305,000 is reinvested to repair theexisting apartment complex
15. An installment sale:
A. Can defer the recognition of a loss on the sale of realestate.
B. Applies only when a payment is received after the close of thetax year in which the sale occurs.
C. Must be applied in all situations when a payment is receivedafter year end.
D. Can only be used for new construction.
E. All of the above.
