Mr and Mrs Blake Suffered Two Casualty Losses This Year

Mr and Mrs Blake suffered two casualty losses this year. Mr Blake's wallet containing $1,300 cash was stolen, and their uninsured sailboat (basis $67,000; FMV $50,000) was destroyed by a tsunami (a federally declared disaster) . Compute the Blakes' itemized deduction for casualty losses if their AGI was $112,200.

A) $39,880
B) $55,680
C) $38,680
D) None of the above.