Camilo’s property, with an adjusted basis of $155,000, is condemned by the state. Camilo receives property with a fair market value of $180,000 as compensation for the property taken.

a. What is Camilo’s realized and recognized gain?

b. What is the basis of the replacement property

The correct answer for (a) is $25,000 and $0 and for option (b) is $155,000.

Explanation:

According to the scenario, the computation of the given data are as follows:

Adjusted basis = $155,000

Fair market value = $180,000

(a). Realized gain = Fair market value - Adjusted basis

= $180,000 - $155,000

= $25,000

As, fair market value is more than the adjusted basis, so there will be no recognized gain.

So, Recognized gain = $0

(b). We can calculate the basis of the replacement by using following formula:

Basis = Market value - Realized gain

= $180,000 - $25,000

= $155,000

the u.s. census bureau produces data on the population and economy nationwide. it can you to analyze the kind of people living in your neighborhood. it does not show you the market of people willing to buy your product or an existing market for your product. that will require more market research. the census bureau only gives you an insight to the demographics in your area.