Chapter $5$ Itemized Deductions

EA LO $5-563.$ Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam

break near their home in $2023,$ which was declared a federally designated disaster area.

The flood damage ruined the furniture that was stored in their garage. The following items

were completely destroyed and not salvageable:

Their homeowner's insurance policy had a $$10,000$ deductible for the personal property,

which was deducted from their insurance reimbursement of $$12,700,$ resulting in a net

payment of $$2,700.$ Their AGI for $2023$ was $$60,000.$ What is the amount of casualty loss

that Reynaldo and Sonya can claim on their joint return for $2023?$