Mario's Delivery Van Is Completely Destroyed When a Tree Fell

question 71

Multiple Choice

Mario's delivery van is completely destroyed when a tree fell on it. Mario's insurance company pays him $11,000 for the accident. The van cost $20,000 three years ago. Tax depreciation deductions of $6,000 have been taken to date. The "Blue Book value" (i.e., fair market value) of the van is $12,000 on the accident date. What is Mario's casualty loss on the van?

• A)$- 0 -
• B)$ 1,000
• C)$ 3,000
• D)$ 8,000
• E)$13,000

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Definitions:

Liability

Legal responsibility for one's actions or omissions, potentially leading to civil duty or financial compensation.

Tort

A civil wrong, other than breach of contract, that causes harm or loss, resulting in legal liability for the person who commits the tortious act.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry.

Point-Of-Sale Disclosure

Information provided to consumers at the time of sale, detailing important facts and conditions about the product or service being purchased.