Gomez, a Self-Employed Consultant, Is Involved in a Traffic Accident

question 3

Multiple Choice

Gomez, a self-employed consultant, is involved in a traffic accident with his business-use automobile. The car is totally destroyed and Gomez's insurance policy reimburses him $8,000 for the fair market value of the car immediately before the accident. His basis in the car is $11,000. What is the amount of Gomez's casualty loss deduction?

• A)$- 0 -
• B)$ 2,000
• C)$ 3,000
• D)$ 8,000
• E)$11,000

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Definitions:

Magma Cooled

The process by which magma loses heat and solidifies to form igneous rocks, typically beneath the Earth's surface.

Dissolved Gas

Gas that is mixed in and held in solution by a liquid.

Diorite

A medium- to coarse-grained, intermediate-composition igneous rock; the phaneritic equivalent of andesite.

Dissolved Gas

A gas that has been absorbed into a liquid solution, such as carbon dioxide in water, often influencing chemical reactions and physical properties.