Alma Is in the Business of Dairy Farming

question 49

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. Alma has adjusted gross income for the year of $40,000 (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 the above

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Definitions:

Influence Superiors

describes the ability to affect the views or actions of those in higher positions in an organization or society.

Influence Tactic

Strategies or approaches used by individuals to sway or alter others' attitudes, beliefs, or actions toward a desired outcome.

Legitimating

The process of making something acceptable and justifiable by norms, standards, or laws.

Reward Power

Reward power is a form of influence based on the ability to offer rewards or positive incentives in order to motivate or control the behavior of others.