Question

A tornado damaged Louise's home on August 17, this year. The tornado was a federally declared disaster. To restore the destroyed property she paid the following amounts: $80,000 to repair the damage to the house. The house originally cost $70,000 and was worth approximately $90,000 at the time of the tornado. Louise filed a claim with her insurance company and received $65,000. She has AGI of $30,000 The measure of the loss as the starting point of the calculation is: 42. O a. $80,000 b. $70,000 C. $90,000 O Od d. None of the above.

If this is personal casualty loss, it must exceed how much to be deductible? For any of his loss to be deductible it must be greater than? His deductible loss is? If the tornado caused 2000 additional damage to furniture, deductible casualty loss would be?

Answer 1

SOLUTION:-

The measure of the loss as the starting point of the solution is:-

Answer is highlighted in yellow: Solution: b. $70,000 Answer: 110) Explanation: $ Personal 70,000 90000 Adjusted Basis before Tomado FMV Before Damage FMV after Damage Decrease in FMV or Repair Smaller of line i oriji Less: Insurance proceed Less: $100 floor for each asset Less: 10% of AGI (30000*10%) Casualty loss deductable $ $ $ $ $ $ 80,000 70,000 -65,000 -100 -3,000 1,900

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