On December 31 of the current year, a building owned by Pine Corp. was totally destroyed by fire. The building had fire insurance coverage up to $500,000. Other pertinent information as of December 31 of the current year follows:
Building, carrying amount $ 520,000
Building, fair market value 550,000
Removal and cleanup cost 10,000
During January of the following year, before the current year financial statements were issued, Pine received insurance proceeds of $500,000.
Required:
1. On what amount should Pine base the determination of its loss on involuntary conversion?