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Gem Company's manufacturing facility was destroyed by a flood. The facility's adjusted basis was $665,000,...

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Accounting

Gem Company's manufacturing facility was destroyed by a flood. The facility's adjusted basis was $665,000, and Gem received an $850,000 insurance reimbursement. Within 18 months of the flood, Gem rebuilt the facility at a total cost of $975,000. Which is Gem's basis in the new facility?

A) 790,000

B) 850,000

C) 665,000

D) 1,160,000

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