(Solution) - One of Reddy s Fancy Dog Food factories is destroyed by -(2025 Original AI-Free Solution)

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One of Reddy?s Fancy Dog Food factories is destroyed by a tornado. The factory has an adjusted basis of $375,000. Reddy?s receives $540,000 from its insurance company to cover the loss. What is the minimum amount of gain that must be recognized in each of the following situations and the basis of any property purchased with the insurance proceeds?
a. Reddy?s decides that the lost production could be made up by its other factories and uses the proceeds to pay a cash dividend to its shareholders.
b. Reddy?s purchases another factory for $590,000.
c. Reddy?s purchases another factory for $480,000.
d. Reddy?s purchases another factory for $350,000.