Question

list of the items that faith sold and the losses she incurred during the current tax year is as follows: yellow, inc. stock $1,600 faith's personal use suv 8,000 faith's personal residence 10,000 city of newburyport bonds 900 she also had a theft loss of $1,500 on her uninsured business use car. calculate faith's deductible loss (before any limitations)

Answer 1

Faith's deductible loss (before any limitations) for the current tax year is $22,000.

Step-by-step explanation:

Faith sold several items during the current tax year. The list of items she sold and the losses incurred are as follows:

• Yellow, Inc. stock - loss of $1,600
• Faith's personal use SUV - loss of $8,000
• Faith's personal residence - loss of $10,000
• City of Newburyport bonds - loss of $900

In addition to these losses, Faith also experienced a theft loss of $1,500 on her uninsured business use car.

To calculate Faith's deductible loss before any limitations, you simply add up all the losses she incurred: $1,600 + $8,000 + $10,000 + $900 + $1,500 = $22,000.

Answer 2

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.