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

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

Quizplus · Accepted Answer

Only Asset X resulted in a long-term capital gain because it was held for more than one year before being destroyed. Assets Y and Z resulted in short-term capital losses because they were held for less than one year. Therefore, Option B with a long-term gain for Asset X and short-term losses for all three assets is incorrect. Option D is incorrect because it includes a short-term loss of $300 for Asset Z which is not given in the problem statement. Option A is incorrect because it does not consider the fact that some assets resulted in losses. The correct answer is C, which reports a long-term gain of $5,000 on Asset X and short-term losses of $900 on Asset Y and $200 on Asset Z.

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