Determine deductible loss on the car

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Reference no: EM13142463

Jim had a car accident in 2009 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 80% of the value of the car at the time of the accident. If Jim's AGI for the year is $50,000, determine his deductible loss on the car.

A) $500.

B) $6,000.

C) $10,500.

D) $30,000.

E) None of the above.

Reference no: EM13142463

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