Alma Is in the Business of Dairy Farming

question 99

Multiple Choice

Alma is in the business of dairy farming.During the year, one of her barns was completely destroyed by fire.The adjusted basis of the barn was $90,000.The fair market value of the barn before the fire was $75,000.The barn was insured for 95% of its fair market value, and Alma recovered this amount under the insurance policy.She has adjusted gross income of $40,000 for the year (before considering the casualty) .Determine the amount of loss she can deduct on her tax return for the current year.

• A)$3,750
• B)$14,650
• C)$14,750
• D)$18,750
• E)None of these.

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Definitions:

HPA Axis

The hypothalamic-pituitary-adrenal axis, a complex set of direct influences and feedback interactions among three components: the hypothalamus, the pituitary gland, and the adrenal glands, crucial for the body’s response to stress.

Resting Levels

Baseline measurements of physiological, metabolic, or neural activity in an individual at rest, used for comparison with levels during tasks or conditions.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood glucose; plays roles in metabolism regulation and immune response modulation.

Trauma Reminders

External cues that can trigger a traumatic memory, leading to psychological distress.