Ron and Willie's home was damaged by a flood this year. The fair market value of the home before the flood was $300,000 and was $180,000 after the flood. Their flood insurance on the property reimbursed them $50,000 for this damage since this was the maximum allowed under the policy. Ron and Willie had purchased the home 10 years ago for $200,000. Their adjusted gross income for the year is $ 150,000. What is their casualty loss deduction after all reductions are considered?

$54,900

$55,000

$120,000

$200,000