Find the deductible loss on the car

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Problem 1: Johnny had a car accident in 2020 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. Johnny used the car 100% of the time for business use. He received an insurance recovery of 70% of the value of the car at the time of the accident. If Johnny's AGI for the year is $60,000, determine his deductible loss on the car.

a.$19,000
b.$3,000
c.$2,900
d.$9,000

Reference no: EM132728568

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