Larry purchased an office building in October 2003, which he rented to various b

Question

Larry purchased an office building in October 2003, which he rented to various businesses. On June 24th of the current year the property was totally destroyed by a tornado. He received a check for $550,000 from the insurance company for the destruction of the building. Thomas has a $115,000 offer for the land where the destroyed property was located. He is thinking about selling the land and purchasing an upscale apartment building. Before he sells the land he wants to know what the income tax effect will be if sells the land and purchases the apartment building.

I am assigned to do research on this including using tax cases and the IRC code. I am struggling to find any relevant IRC sections or tax court cases.

Explanation / Answer

Since you have asked for the IRC section or court cases.

I am giving the links for this. I am also giving the relevant IRC sections also.

IRC section for the same is Section 139 of the IRC. You casn refer the attached case and writeup. If you have any point please contact.

https://www.fas.org/sgp/crs/misc/R42839.pdf

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