A taxpayer’s delivery van with an adjusted basis of $7,000 wasstolen. Luckily, the taxpayer had comprehensive insurance on thevan so the taxpayer received $10,000 to cover the loss (i.e., itwas valued at $10,000 at the time of theft). The taxpayer isconsidering buying a new van for $15,000. What gain does thetaxpayer recognize and what would the replacement van’s basisbe?
Gain:
Basis in replacement van:
2. A taxpayer’s delivery van with an adjusted basis of $7,000was stolen. Luckily, the taxpayer had comprehensive insurance onthe van so the taxpayer received $10,000 to cover the loss (i.e.,it was valued at $10,000 at the time of theft). The taxpayer isconsidering buying a used van for $9,000. What gain does thetaxpayer recognize and what would the replacement van’s basisbe?
Gain:
Basis in replacement van:
