Jewel's home was completely destroyed by fire in 2016. The building had an appraised value of $185,000 before the fire. Four years ago, Jewel paid $160,000 for the house and the land, with $25,000 of the price allocated to the land.
a. What is Jewel's loss on the fire, assuming no insurance?
b. What is her deductible loss if her adjusted gross income is $40,000?
c. What is Jewel's realized gain or loss if she receives $190,000 from the insurance company to rebuild the home?
d. What is her recognized gain if she uses only $130,000 of the insurance proceeds to rebuild a smaller replacement residence on the same land?