In 2020, Susan (who files as single) had silverware worth $10,000 (basis $6,000) stolen from her home due to a federal declared disaster area. Her insurance company told her that her policy did not cover the theft. In 2020, Susans other itemized deductions were $2,000, and she had AGI of $40,000. In February 2021, Susans insurance company decided that Sarahs policy did cover the theft of the silverware and they paid Susan $4,000. Determine the tax treatment of the $4,000 received by Susan during 2021.

	a.	None of the $4,000 should be included in gross income.
	b.	$2,000 should be included in gross income.
	c.	$4,000 should be included in gross income.
	d.	Last years return should be amended to include the $4,000.