Chapter 7. information is as follows: FMV before $500,000 FMV after $100,000 Adjusted Insurance Item Home Auto Basis Proceeds $350,000 $280,000 60,000 40,000 10,000 20,000 Because of the extensive damage caused by the tornado, the President designated the area a disaster area. Olaf and his wife, Anna, always file a joint return. Their 2016 tax return shows AGI of $180,000 and taxable income of