This question and the next question concerns two property transactions involving the same taxpayer: Walter experienced two significant losses in 201. First, his home was destroyed in a fire and he received $600,000 insurance proceeds. His adjusted basis in the home was $800,000 at the date he received the proceeds. Second, his restaurant was completely destroyed by an earthquake. Unfortunately, he didn't have any insurance. His adjusted basis in and the fair market value of the restaurant was $400,000 on the date of the earthquake. Walter has owned both properties for many years and the two losses represent the only property transactions that Walter was involved in for the taxable year. Which of the following statements is correct regarding these two transactions? Select one: a. The losses must be deferred under IRC 1033. b. Both losses are treated as firepot losses. c. Both losses are deductible, above the line losses. d. Both losses are deductible losses subject to a special 10% limitation rule. e. None of the above