In the current year, Wilson Enterprises, a calendar year taxpayer, suffers a casualty loss of $90,000....
In the current year, Wilson Enterprises, a calendar year taxpayer, suffers a casualty loss of $90,000. The casualty was attributable to a Federally declared disaster. How much of the casualty loss will be deductible by Wilson under the following circumstances?
a. Wilson is an individual proprietor and has AGI of $225,000. The casualty loss was a personal loss, and the insurance recovered was $50,000 before any limitations.
Wilson can claim a casualty loss as an itemized deduction of $______________
b. Assume Wilson is a C corporation, and the insurance recovered was $50,000 before any limitations.
Wilson can deduct $__________
Homework Answers
Statement showing calculation of casualty loss:
a.
Particulars Amount($)
Loss 90,000
Insurance Recovery (50,000)
Loss after Insurance Reimbursement 40,000
Less: Single Event Deduction 100
Loss after $100 rule 39,900
Less: 105*225,000(AGI) 22,500
Casualty Loss Deduction 17,400
Therefore casualty loss deductible for Wilson is $17,400
b.
Casualty loss is a personal loss and Wilson is a corporation. Hence casualty loss available to Wilson Corporation is $0.
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