Leonard Owns a Hotel Which Was Damaged by a Hurricane

question 142

Multiple Choice

Leonard owns a hotel which was damaged by a hurricane. The hotel had an adjusted basis of $1,000,000 before the hurricane. A recent appraisal determined that the hotel's FMV was $1,500,000 before the hurricane and $700,000 afterwards. Leonard received insurance proceeds of $500,000. His AGI is $60,000. What is the amount of his deductible casualty loss?

• A) $800,000
• B) $793,900
• C) $300,000
• D) $293,900

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