A business consultant's computer equipment with a $5,000 adjusted basis was destroyed by a flood. In the same year, his business car with a $4,000 adjusted basis was destroyed in an accident. The computer equipment was notcovered by flood insurance. The auto was covered for collision; the insurance recovery was $6,000. Which of the following is true?
A. The consultant has a $1,000 capital gain.
B. The consultant has a $3,000 capital loss.
C. The consultant has a $3,000 ordinary loss
D. The consultant has a $5,000 ordinary loss and a $2,000 capital gain