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Relds personal residence is condemned on September 12, 2018, as part of a plan to add two lanes to the existing highway. His

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Answer #1

Insurance amount             = $287,250

(-) Adjusted basis amount = $250,000

Realized gain                    = $37,250

Replacement for $271,250 would normally result in gain of $16,000 ($287,250-$271,250).

But this gain of $16,000 is not recognized becasue it is a personal residence and gain on personal residence is excluded under IRC §121.

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