In the Current Year,Marcus Reports the Following Casualty Gains and Losses

question 124

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. 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:

Stalagmite

A type of speleothem that rises from the floor of a cave due to the accumulation of material deposited on the floor from ceiling drippings.

Limestone Caves

Natural underground spaces formed by the dissolution of limestone by acidic water.

Sinkholes

Depressions or holes in the ground caused by the collapse of a surface layer, often due to the dissolution of underlying limestone.

Quartz Crystals

A common and varied mineral species made of silicon dioxide (SiO2), noted for its hardness and crystalline structure.