In the Current Year, Marcus Reports the Following Casualty Gains

question 29

Multiple Choice

In the current year, Marcus reports the following casualty gains and losses on personal-use property. Assets X and Y are destroyed in the first casualty while Z is destroyed in a second casualty. $$\begin{array} { | l | r | r | r | c | } \hline \text { Asset } & \begin{array} { c } \text { Reduction } \\\text { in FMV }\end{array} & \text { Adjusted Basis } & \text { Insurance } & \begin{array} { c } \text { Holding } \\\text { Period }\end{array} \\\hline X & \$ 8,000 & \$ 2,000 & \$ 7,000 & 2 \text { years } \\\hline Y & 3,000 & 5,000 & 2,000 & 10 \text { months } \\\hline Z & 2,500 & 1,300 & 1,000 & 8 \text { months } \\\hline\end{array}$$ As a result of these losses and insurance recoveries, Marcus must report

• A) a net gain of $3,700.
• B) a long-term gain of $4,900 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
• C) a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
• D) a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $300 on asset Z.

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Definitions:

Hypotension

A medical condition characterized by blood pressure that is too low, which can lead to symptoms like dizziness or fainting.

Illness Anxiety Disorder

A disorder characterized by excessive worry about having a serious, undiagnosed medical condition despite few or no symptoms and frequent medical reassurance.

Bodily Functions

Bodily functions refer to the physiological processes and activities performed by the body's systems, including digestion, respiration, circulation, and reproduction.

Health Condition

Any disease, disorder, injury, or other physical or mental impairment that affects an individual's body or mind.