A is corrent. A loss resulting from a nonbusiness deposit in an insolvent financial institution is generally treated as a nonbusiness bad debt deductible as a short-term capital loss. However, subject to certain limitations, an individual may elect to treat the loss as a casualty loss or as a miscellaneous itemized deduction.
B is incorrect. Subject to certain limitations, an individual may elect to treat the loss as a casualty loss.
C is incorrect. Subject to certain limitations, an individual may elect to treat the loss as a miscellaneous itemized deduction.
D is incorrect. A loss resulting from a nonbusiness deposit in an insolvent financial institution is generally treated as a nonbusiness bad debt deductible as a short-term capital loss.
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