An office machine with a market value of $10,000 used by Josie in her accounting business was completely destroyed by fire. The adjusted basis of the machine was $8,000 (original basis of $14,000 less accumulated depreciation of $6,000). The machine was not insured.

Calculate the amount and nature of Josie's gain or loss as a result of this casualty. (Assume this is the taxpayer's only casualty gain or loss.)

Amount of gain or loss: and is it Capital gain/Capital loss/Ordinary gain/Ordinary loss?