Question

In 2018, Grant’s personal residence was completely destroyed by fire. Grant was insured for 100% of his actual loss, and he received the insurance settlement. Grant had adjusted gross income, before considering the casualty item, of $30,000. Pertinent data with respect to the residence follows: Cost basis $280,000Value before casualty 250,000Value after casualty What is Grant's allowable casualty loss deduction? (A) $10,000(B) $6,900(C) $80,000(D) $6,500(E) $0

Answer 1

(E) $0

Step-by-step explanation:

The answer is $0

because you can only deduct losses not reimbursed or reimbursable by insurance or other means. The losses from casualty item are not deductible.

So, the correct answer is (E) $0