Question

Tax Drill - Casualty Loss Deduction

Belinda was involved in a boating accident in 2019. Her speedboat, which was used only for personal use and had a fair market value of $28,000 and an adjusted basis of $14,000, was completely destroyed. She received $10,000 from her insurance company. Her AGI for 2019 is $37,000.

Belinda's tentative casualty loss before any limitations (i.e. $100 floor and AGI) is $.

Is her loss currently deductible? Only to the extend the loss can offset other personal casualty gains.

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The rules for determining the amount of a loss depend in part on whether business use, income-producing use, or personal use property was involved. Another factor that must be considered is whether the property was partially or completely destroyed.

Answer 1

Given question relating to how the amount of loss is deductible and upto what amount is deductible.

And what are the elements needs to get total loss itemized for deduction. Refer image for above question solution.

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