Final answer:
Faith's potentially deductible loss before limitations includes up to $3,000 for excess capital losses on stock and bond sales, and $1,500 for the theft loss on her business car. Losses on her personal SUV and residence are generally not deductible unless under specific conditions.
Step-by-step explanation:
To calculate Faith's deductible loss for the current tax year, we need to examine each of the losses she incurred. According to the Internal Revenue Code, deductions for capital losses and casualty/theft losses are treated differently.
- Yellow, Inc. stock sale loss: $1,600 (as a capital asset, if losses exceed gains, up to $3,000 can be deducted against other income)
- Personal use SUV loss: $8,000 (generally not deductible unless it's a casualty loss)
- Personal residence loss: $10,000 (not deductible as a capital loss unless due to a casualty or disaster)
- City of Newburyport bonds loss: $900 (treated as a capital loss)
- Theft loss on uninsured business use car: $1,500 (deductible as a casualty loss on business property)
Before any limitations, the deductible loss from the stock and bond sales is potentially up to $3,000 against other income if capital losses exceed capital gains for the year. The $1,500 theft loss on the business use car is fully deductible. The personal use SUV and personal residence losses are generally not deductible unless specific conditions are met.
Without more specific tax information, it is not possible to accurately calculate the deductible amount, as certain losses are subject to thresholds, limitations, or conditions that must be met. To obtain a precise number, Faith would need to consult the IRS guidelines or a tax professional.