on Sept 1 of the tax year Alex's fishing boat sank off the coast of NC due to a severe storm. The FMV of the boat prior to the casualty was $60,000. He bought the boat 5 years earlier for $35,000. His insurance reimbursed him $50,000. In November of the tax year, he purchased a smaller boat for $40,000. What is his recognized taxable gain for the year of the casualty.

a. $0

b. $10,000

C. $25,000

d. $50,000