A sculpture that Korliss Kane held for investment was destroyed in a flood. The sculpture was insured, and Korliss had a $60,000 gain from this casualty. He also had a $17,000 loss from an uninsured antique vase that was destroyed by the flood. The vase was also held for investment. Korliss had no other property transactions during the year and has no nonrecaptured 5.231 losses from prior years. Both the sculpture and the vase had been held more than one year when the flood occurred (i.e., both are long-term nonpersonal use capital assets). a. Compute Korliss's net gain or loss, and identify how it would be treated. Korliss has of $ for the year. That is treated as b. Complete a letter to Korliss explaining the nature of the gain or loss. SWFT, LLP 5191 Natorp Boulevard Mason, OH45040 November 23,2022 Mr. Korliss Kane 2367 Meridian Road Hannibal, MO 63401 Dear Mr. Kane: Thank you for the opportunity to discuss the tax effect of the two casualties you suffered this year. Both the sculpture and the vase were assets you were holding for investment. The sculpture casualty resulted in a $60,000 gain because it was insured. The vase casualty resulted in a $17,000 loss because it was not insured. This results in of $ . Because you had no in prior years, the is treated as The is eligible for a tax rate of no more than %. If you have any questions concerning these transactions or other tax matters, please feel free to contact me. Sincerely, Sheila Dailey, CPA Partner