A Fire Totally Destroyed Office Equipment and Furniture Which Monica

question 6

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

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Definitions:

Net Advantage to Leasing

The total financial benefit of leasing an asset, comparing the costs of leasing versus buying.

Resale Value

The estimated market value at which an asset can be sold in the future.