Which of these alternatives should wanda choose

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Wanda,a calendar year taxpayer, owned a building ( adjusted basis of 250,000) in whch operated a bakery that was destroyed by fire in December 2011. She receives insurance proceeds of 290,000 for the building the following March. Wanda is considering two options regarding the investment of the insurance proceeds. First, she could purchase a local building (suitable to bakery) that is for sale for 275,000. Second, she could buy a new home for 290,000 and go back to college and finish her degree.

a) To minimize her tax liability , which of these alternatives should Wanda choose?

b) What is the latest date on which Wanda can replace the involuntarily converted property to qualify for &1033?

c) What is the latest day on which Wanda can replace the involuntarily converted property to qualify for &1033 if the involuntary conversion is a condemnation?

Reference no: EM13135838

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