See https://www.irs.gov/publications/p547#en_US_2022_publink1000225390
Taxpayers can generally postpone the recognition of gain to the extent they purchase replacement property per Section 1033.
The basis of the replacement property would be the same as that for the property that was subject to the theft, loss, or other casualty (basis is decreased by the amount of insurance reimbursement not expended for the replacement property - basis is also decreased if any loss was previously recognized and increased if any gain was previously recognized).
Further, an asset costing asset $2500 or less (business use) subject to the de minimis safe harbor election (which effectively have a basis of $0) is not considered to be Section 1231 property or a capital asset. As a result, any recognized gain on that asset would be taxed at ordinary income tax rates and not limited to depreciation recapture rates (i.e., capped at 25%).
