A Fire Totally Destroyed Office Equipment and Furniture Which Monica

question 181

Multiple Choice

A fire totally destroyed office equipment and furniture which Monica uses in her business. The equipment had an adjusted basis of $15,000 and a FMV of $10,000 before the fire. The furniture's adjusted basis was $5,000 and its FMV was $2,000 before the fire. Monica's AGI for the year is $60,000. Monica does not have insurance on the destroyed assets. How much is Monica's deductible casualty loss?

• A) $20,000
• B) $13,900
• C) $5,900
• D) $12,000

---

Definitions:

Industrialized Countries

Nations characterized by significant industrial activity, a high level of development, and a strong economy.

Savings Rate

The percentage of disposable income that is set aside as savings instead of being expended on goods and services.

Economic Growth

An increase in a country's capacity to produce goods and services, compared from one period of time to another.

Workers

Individuals engaged in any form of employment or labor to produce goods or provide services.