Question

Logan Wharton sold his warehouse to public utility for $24,000 under threat of condemnation. He paid $25,000 for the property and spent additional $1000 on roof. He had claimed $3600 depreciation. He had $200 in legal fees. Logan made a timely purchase of a replacement warehouse for $20000. Logan recognizes.
A. no gain until he sells the replacement property
B. $1400 gain
C. $4000 gain
D. A loss on the condemnation

Answer 1

He patd foe the poepety $ 25,000 Additional epenses on oot Add 1000 Legal fees Add $200 Total cestot Popety 26, 200 $ 3600 Depreeciadion $22 600 Nalue o property al the 1me a salas Sales priee ot Popoty Sales of Property २५.००० $1400 GaSn on Cororeet .. Option e

Note: It is assumed that the legal fees paid by Logan Wharton at the time of purchase is a one time cost. For this it is added to the cost of the property.