2 Darryl pays $8,000 in self-employment tax (Social Security and Medicare). What impact if any will this have on his regular federal income tax? No effect. An $8,000 itemized deduction. A $4,000 "above the line" deduction. A $4,000 itemized deduction. QUESTION 3 Carol's factory burns down in 2020. Her basis in it was $175,000, and she received $300,000 in insurance proceeds from her fire insurance company. She spends $280,000 on a new factory in 2021. How much gain is she taxed on as a result of the situation? Zero. $20,000. $105,000. $125,000