Question

Linda's AGI for the year is 30,000. Her residence sustained damage from hurricane Maria (a federally declared natural disaster) in the current year: Her adjusted basis in the house: $150,000 Fair market value immediately before Maria $200,000 Fair market value immediately after Maria $180,000 How much will be her deductible casualty loss for the year

Answer 1

Answer: $16900

Step-by-step explanation:

Her deductible casualty loss for the year would be:

Fair market value = $200,000

Less: FMV after Maria = $180,000

Reduction in the FMV of house = $20,000

Less: 10% of AGI = 10% × $30,000 = 0.1 × $30,000 = $3,000

Remaining Value after deduction = $17,000

Less: $100 deduction = $17000 - $100 = $16900

Therefore, deductible casualty loss for the year is $16,900