Leonard Owns a Hotel Which Was Damaged by a Hurricane

question 31

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

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Definitions:

Larynx

The voice box or the area of the throat containing the vocal cords and used for breathing, swallowing, and speaking.

Pharynx

The muscular tube that serves as a pathway for the movement of food to the esophagus and air to the larynx.

Trachea

The windpipe, a tube connecting the larynx to the bronchi, allowing air flow to and from the lungs for respiration.

Cardiac Notch

A concave space on the left lung's surface, accommodating the heart's position.