Question: Ram Corp.s operating income for the year ended December 31, 2010, amounted to $100,000. Also in 2010, a machine owned by Ram was completely destroyed

Ram Corp.’s operating income for the year ended December 31, 2010, amounted to $100,000. Also in 2010, a machine owned by Ram was completely destroyed in an accident. This machine’s adjusted basis immediately before the casualty was $15,000. The machine was not insured and had no salvage value.

In Ram’s 2010 tax return, what amount should be deducted for the casualty loss?

a. $ 5,000

b. $ 5,400

c. $14,900

d. $15,000

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