In the Current Year, Marcus Reports the Following Casualty Gains

Multiple Choice

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. $$\begin{array} { | l | r | r | r | c | } \hline \text { Asset } & \begin{array} { c } \text { Reduction } \\\text { in FMV }\end{array} & \text { Adjusted Basis } & \text { Insurance } & \begin{array} { c } \text { Holding } \\\text { Period }\end{array} \\\hline X & \$ 8,000 & \$ 2,000 & \$ 7,000 & 2 \text { years } \\\hline Y & 3,000 & 5,000 & 2,000 & 10 \text { months } \\\hline Z & 2,500 & 1,300 & 1,000 & 8 \text { months } \\\hline\end{array}$$ 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.