Sandra's Automobile, Which Is Used Exclusively in Her Trade or Business

question 214

Multiple Choice

Sandra's automobile, which is used exclusively in her trade or business, was damaged in an accident. The adjusted basis prior to the accident was $11,000. The fair market value before the accident was $10,000 and the fair market value after the accident is $6,000. Insurance proceeds of $3,200 are received. What is Sandra's adjusted basis for the automobile after the casualty?

• A) $0
• B) $7,000
• C) $7,800
• D) $10,200
• E) None of the above

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Definitions:

Skill Development

The process of learning and refining abilities and techniques in a specific area to improve competence and performance.

Muscular Coordination

The ability to use different parts of the body together smoothly and efficiently.

Creeping

A form of locomotion where an infant starts moving on their hands and knees before they are able to walk, typically occurring around 6 to 10 months of age.

Grasping Objects

The act of taking hold of and holding an object using the hands or fingers, a skill that develops early in human life.