In the current year,Marcus reports the following casualty gains and losses on personal-use property.Assets X and Y are destroyed in the first casualty while Z is destroyed in a second casualty. As a result of these losses and insurance recoveries,Marcus must report
A)a net gain of $3,700.
B)a long-term gain of $4,900 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
C)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
D)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $300 on asset Z.

Question

In the current year,Marcus reports the following casualty gains and losses on personal-use property.Assets X and Y are destroyed in the first casualty while Z is destroyed in a second casualty.  As a result of these losses and insurance recoveries,Marcus must report
A)a net gain of $3,700. 
B)a long-term gain of $4,900 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z. 
C)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z. 
D)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $300 on asset Z.

Quizplus · Accepted Answer

C)
 11ea7cb8_5487_2199_928c_ffc44e36d8df_TB1258_00 If the netting process results in a net gain,each item is treated as a separate capital gain and loss.Thus,there is a $5,000 LTCG on Asset X; the $1,000 STCL on Asset Y is reduced by the $100 floor; the $300 STCL on Asset Z is reduced by the $100 floor.

In the Current Year,Marcus Reports the Following Casualty Gains and Losses