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.Both casualties were the result of federal disasters.

\begin{array} { | l | r | r | r | c | } \hline \text { Asset } & \begin{array} { c } \text { Reduction } \\\text { in FMV }\end{array} & \begin{array} { c } \text { Adjusted } \\\text { Basis }\end{array} & \text { Insurance } & \begin{array} { c } \text { Holding } \\\text { Period }\end{array} \\\hline \mathrm { X } & \$ 8,000 & \$ 2,000 & \$ 7,000 & 2 \text { years } \\\hline \mathrm { 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.

Jeff Owned One Passive Activity

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge