Problem: Jackie Smith had a fur coat that cost $12,000 when purchased in 1998 and that was worth $14,000 when it was stolen on April 15, 2008. Her t.v. which cost $800 in 2003 and was worth $600, was also stolen. She received $10,000 from her insurance company for the theft of the two items. On July 20, 2008, her summer cottage was a basis of $62,000 was completely destroyed by a tornado. The insurance proceeds were $65,000. What gain or loss would Jackie recognize and how is it treated? Jackie's adjusted gross income for 2008 is $25,000.