Problem: Brett had adjusted gross income of $60,000. During the year, his personal use summer home was partially destroyed by a fire. Pertinent data with respect to the home follows:
Cost basis $ 250,000
Value before casualty $ 270,000
Value after casualty $ 130,000
Brett was insured for 70% of his actual loss and he received the insurance settlement. What is Brett's allowable casualty loss deduction?
a. $140,000.
b. $42,000.
c. $36,000.
d. $35,900.
e. $0.