Jim had a car accident in 2012 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 personal 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.
Correct Answer:
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