Jim Had a Car Accident in 2011 in Which His

question 2

Multiple Choice

Jim had a car accident in 2011 in which his car was completely destroyed.At the time of the accident,the car had a fair market value of $30,000 and an adjusted basis of $40,000.Jim used the car 100% of the time for personal use.Jim received an insurance recovery of 70% of the value of the car at the time of the accident.If Jim's AGI for the year is $60,000,determine his deductible loss on the car.

• A) $900.
• B) $2,900.
• C) $3,000.
• D) $9,000.
• E) None of the above.

---

Definitions:

Journal Entry

A record in the accounting journal that represents a business transaction, including information on debits and credits to various accounts.

Sale of Bonds

The process by which a corporation or government issues bonds to investors in order to raise capital.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value.

Market Rate

The prevailing interest rate available in the marketplace for investments of a similar nature and risk.