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:

Stimulus

Anything that can invoke a physiological response or reaction from an organism or a cell.

Voltage-Gated Channels

Protein channels in cell membranes that open or close in response to changes in electrical voltage, crucial for nerve impulse transmission.

Depolarization

The process by which a cell's membrane potential becomes less negative, moving towards a more positive charge, typically initiating an action potential.

Activation Gate

A mechanism of ion channels within cellular membranes that allows ions to enter or exit a cell in response to physiological signals.