A flood (federally declared disaster) destroyed an antique Persian rug owned by Mr and Mrs McConnell. The couple purchased the rug for $13,000 fifteen years ago, but its appraised FMV before the flood was $42,500. Unfortunately their homeowners' insurance policy does not cover flood damage. Compute the McConnells' casualty loss (before the 10% AGI threshold).

$42,500

$13,000

$42,400

$12,900