Question

A tornado damaged Louise's home on August 17, this year. Torestore the destroyed property she paid the following amounts:

$80,000to repair the damage to the house. The house originally cost$70,000 and was worth approximately $90,000 at the time of thetornado.

Louisefiled a claim with her insurance company and received $65,000. Shehas AGI of $30,000.

If the tornado also caused $2,000 damage to Louise's furnitureand all other facts remained the same, the amount of Louise'sdeductible casualty loss would be:

	a.	a. $5,000.
	b.	b. $3,900.
	c.	c. $7,000.
	d.	d. $92,000.
	e.	e. None of theabove.