1. Jackie Jaguar had a fur coat that cost $12,000 when purchased in 2015 and that was worth $14,000 when it was stolen on April 15, 2015. Her television, which cost $800 in 2009 and was worth $600, was also insurance company for the theft of the two items. On July 20, 2015, her summer cottage with a basis of $50,000 and a fair market value 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 2015 is $25,000.
2. Frank Fleming recently purchased some new equipment that he plans to use in his business. He paid $43,000 for the equipment. He also paid $2,500 in delivery and installation costs, $1,600 in legal fees, and $3,800 in sales taxes. What is Frank's basis in this equipment?