A Fire Destroyed Furniture and Fixtures Used in Jock's Business

Multiple Choice

A fire destroyed furniture and fixtures used in Jock's business. Jock's adjusted basis in the furniture and fixtures was $81,300. Jock received a $100,000 reimbursement from his insurance company and immediately spent $93,000 to purchase new furniture and fixtures. How much gain or loss must Jock recognize on this involuntary conversion?

A) $18,700
B) $11,700
C) $7,000
D) $0