Knox operated a business which was damaged by a hurricane.His losses were as follows:
$\begin{array}{rrrrrrr}&&&&\text { Insurance }\
\text { Asset } & \text { Basis } & \text { FMV Before } & \text { FMV After } &\text { Proceeds }\
1 & \$ 3,000 & \$ 6,000 & \$ 0& 5,000 \
2 & 45,000 & 65,000 & 0 & 75,000 \
3 & 7,200 & 15,000 & 0 & 0
\end{array}$ a.What is Knox's net casualty loss (if any)assuming his AGI is $85,000 prior to the deduction? Assume he properly replaced all assets.
b.What is his basis in replacement Asset 1 purchased for $8,000 assuming Knox elected the non-recognition of gain from an involuntary conversion?

Question

Knox operated a business which was damaged by a hurricane.His losses were as follows:
 $\begin{array}{rrrrrrr}&&&&\text { Insurance }\
\text { Asset } & \text { Basis } & \text { FMV Before } & \text { FMV After } &\text { Proceeds }\
1 & \$ 3,000 & \$ 6,000 & \$ 0& 5,000 \
2 & 45,000 & 65,000 &  0 & 75,000 \
3 & 7,200 & 15,000 &  0 & 0
\end{array}$ a.What is Knox's net casualty loss (if any)assuming his AGI is $85,000 prior to the deduction? Assume he properly replaced all assets.
b.What is his basis in replacement Asset 1 purchased for $8,000 assuming Knox elected the non-recognition of gain from an involuntary conversion?

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The Answer of Knox operated a business which was damaged by a hurricane.His losses were as follows:
 $\begin{array}{rrrrrrr}&&&&\text { Insurance }\
\text { Asset } & \text { Basis } & \text { FMV Before } & \text { FMV After } &\text { Proceeds }\
1 & \$ 3,000 & \$ 6,000 & \$ 0& 5,000 \
2 & 45,000 & 65,000 &  0 & 75,000 \
3 & 7,200 & 15,000 &  0 & 0
\end{array}$ a.What is Knox's net casualty loss (if any)assuming his AGI is $85,000 prior to the deduction? Assume he properly replaced all assets.
b.What is his basis in replacement Asset 1 purchased for $8,000 assuming Knox elected the non-recognition of gain from an involuntary conversion?

Knox Operated a Business Which Was Damaged by a Hurricane