Jim had a car accident in 2018 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 business 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

Question

Quizplus · Accepted Answer

The Answer of Jim had a car accident in 2018 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 business 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

Jim Had a Car Accident in 2018 in Which His