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Clay Pottersfeld, a cash-basis taxpayer, made pottery in his garage and sold it. In addition to the profit from ordinary pottery sales in the current

Clay Pottersfeld, a cash-basis taxpayer, made pottery in his garage and sold it. In addition to the profit from ordinary pottery sales in the current year, Clay exchanged pottery for a used car worth $2,500. Clay helped a friend make some vases and received $1,200 worth of the vases in return. One of Clays pottery ovens was damaged by vandals; he recovered $1,700 in damages and $1,300 for lost profits while it was being repaired. His basis in the pottery ovens, before damage, was $3,000, and the $1,700 received was equal to the cost of repairs. How much should be included in Clays current-year gross income from these transactions?

A. $3,700 B. $6,700 C. $5,000 D. $2,500

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