Final answer:
The gain realized on the condemnation of Frank's investment property is the difference between the net condemnation award and his adjusted basis, which is $45,000, corresponding to option B.
Step-by-step explanation:
The question revolves around calculating the gain realized on the condemnation of an investment property. Frank's adjusted basis in the property is $145,000, and he received a net condemnation award of $190,000. To calculate the gain, we subtract the adjusted basis from the condemnation award.
The calculation would be $190,000 (condemnation award) - $145,000 (adjusted basis), which gives us a gain of $45,000. Therefore, the correct option for the amount of gain realized on the condemnation is option B. It is important to note that purchasing the replacement property for $275,000 does not affect the realized gain calculation for the condemned property.