Question

Th Jones family had $9,441 worth of hurricane damage that was not covered by insurance. They need to follow IRS procedures to take a casualty deduction on Schedule A tax form.

a) The IRS requires that $100 be deducted from each casualty. What is the total casualty loss after the $100 is deducted?
b) Their adjusted gross income is $67,481. Find 10% of their adjusted gross income.
c) Their Schedule A casualty deduction can be found by subtracting 10% of the adjusted gross income from the answer to part a. What is their casualty loss deduction?

Answer 1

a) The total casualty loss after the $100 deducted is $9,341.

$9,441 - $100 = $9,341

b) 10% of their adjusted gross income is equivalent to $6,748.10.

$6,748.10 × 1 = $6,748.10

c) Their casualty loss deduction is $2,592.90

$9,341 - $6,748.10 = $2,592.90