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

---

Definitions:

Multinational Enterprise

A multinational enterprise is a company that has operations and investments beyond its home country, conducting business in multiple countries around the world.

Licensing

The process by which a licensor grants permission to a licensee to use rights, such as intellectual property rights, under agreed terms and conditions.

Visas

Official documents or endorsements placed within a passport that grant the holder permission to enter, leave, or stay in a foreign country for a specified time period.

Identified Purposes

Specific reasons or objectives for which something is done or for which data is collected, often outlined to ensure clarity and compliance.