36. LO.3, 4, 8 Olaf lives in the state of Minnesota. In May 2022, a tornado hit the area and damaged his home and automobile. Applicable information is as follows: Item Home Auto Adjusted Basis $350,000 60,000 FMV before FMV after $500,000 $100,000 40,000 10,000 Insurance Proceeds $280,000 20,000 Because of the extensive damage caused by the tornado, the President designated the area a Federal disaster area. Olaf and his wife, Anna, always file a joint return. Their 2021 tax return shows AGI of $180,000 and taxable income of $145,000. In 2022, their return shows AGI of $300,000 and taxable income (exclusive of the casualty loss deduction) of $245,000. Determine the amount of Olaf and Anna's loss and the year in which they should take the loss.

36. LO.3, 4, 8 Olaf lives in the state of Minnesota. In May 2022, a tornado hit the area and damaged his home and automobile. Applicable information is as follows: Item Home Auto Adjusted Basis $350,000 60,000 FMV before FMV after $500,000 $100,000 40,000 10,000 Insurance Proceeds $280,000 20,000 Because of the extensive damage caused by the tornado, the President designated the area a Federal disaster area. Olaf and his wife, Anna, always file a joint return. Their 2021 tax return shows AGI of $180,000 and taxable income of $145,000. In 2022, their return shows AGI of $300,000 and taxable income (exclusive of the casualty loss deduction) of $245,000. Determine the amount of Olaf and Anna's loss and the year in which they should take the loss.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
7
A hurricane (in a federally declared disaster are) destroys Kirk’s boat in 2020. The boat is worth $40,000, and Kirk paid $30,000 for the boat two years ago. The boat is a personal use asset. Kirk’s AGI for 2020 is $40,000. a. What is the casualty deduction that Kirk can take as an itemized deduction in 2020?
i need the answer quickly
LO.2 Alfred owned a term life insurance policy at the time he was diagnosed with a terminal illness. After paying $18,300 in premiums, he sold the policy to a company that is authorized by the state of South Carolina to purchase such policies. The company paid Alfred $125,000. When Alfred died 18 months later, the company collected the face amount of the policy, $150,000. As a result of the sale of the policy, how much is Alfred required to include in his gross income?
Interview Notes • Carmen, age 61, is single. She owns her home and provided all the costs of keeping up her home for the entire year. Her only income for 2023 was $48,000 in W-2 wages. . . Abigail, age 24, and her daughter Andrea, age 4, moved in with Abigail's mother, Carmen, after she separated from her spouse in April of 2021. Abigail's only income for 2023 was $25,000 in wages. Abigail provided over half of her own support. Andrea did not provide more than half of her own support. Abigail will not file a joint return with her spouse. • All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability. They lived in the United States all year. Advanced Scenario 4: Test Questions 9. For the purpose of determining dependency, Andrea could be the qualifying child of a. Only Carmen b. Only Abigail c. Either Carmen or Abigail d. Neither Carmen nor Abigail 10. Abigail is eligible to claim Andrea for the earned income credit. a. True b. False
LO.2Barbara incurred the following expenses during 2020: $840 dues at a health club she joined at the suggestion of her physician to improve her general physical condition, $240 for multiple vitamins and antioxidant vitamins, $3,500 for a smoking cessation program, $250 for nonprescription nicotine gum, $2,600 for insulin, and $7,200 for funeral expenses for her mother who passed away in June. Barbara's AGI for 2020 is $54,000. What is Barbara's medical expense deduction for 2020? 1
Jes had a personal casualty loss in 20X1 due to a hurricane damaging his home. The area where his loss occurred was a declared federal disaster area. Jes’s 20X1 adjusted gross income was $ 200,000. • The fair market value of John’s home before the casualty was $ 450,000, the fair market value after the casualty was $ 275,000.• John purchased his home 6 years ago for $ 150,000 and made no capital improvements while he owned the house.• John received $ 110,000 from his insurance company due to this loss. How much will Jes deduct as a casualty loss in 20X1 if he itemizes his deductions? a. Zerob. $ 65,000c. $ 40,000d. $ 44,900e. $ 19,900
Andre has an unendorsed HO-3 policy. His roof is torn off by a tornado. His limit on Coverage A is $100,000. RC of the roof is $25,000, and ACV of the roof is $22,000. RC of the covered contents damaged is $65,000, and ACV of the contents is $55,000. Ignoring the effect of any deductible, how much will his insurer pay for this loss? Please show your work.
A hurricane (federally declared disaster) destroyed the Palmer's boat. The couple purchased the boat for $30,000 ten years ago and it was appraised at a FMV of $35,000 before the hurricane. Unfortunately, the Palmers did not have insurance on their boat. Compute the Palmer's casualty loss deduction before applying the 10% AGI threshold? Question 35 Ms. Donor contributed $300.000 in cash to qualified charities this year during 2020. Her AGI was $275.000. How much is Ms. Donor's charitable contribution carry forward. if any. to 2021? (Ignore any temporary changes made to the charitable contribution rules for 2020 made by The Cares Act)
-Betty is an unmarried attorney. During the year a hurricane completely destroys her home, which had a basis of $60,000. The value of her home before the tornado is $100,000 and the value afterwards is $35,000. Betty's home is located in a federally declared natural disaster area. Her AGI is $50,000. What is the amount that Betty can deduct after limitations? Group of answer choices $29,900. $54,900. $59,900. $65,000.
Stan and Stella are married and own a home insured for $250, 000 (Coverage A limit) under an unendorsed HO-3 policy. The policy period is January 1st Dec. 31st. The non- windstorm deductible is $1,000. The windstorm deductible is 2%. Answer the following question based on the above policy information: Stan and Stella's house is completely destroyed by a hurricane winds on September 1st during Hurricane Chucky. The replacement cost of the home at the time of loss is $250, 000. How much will their insurance company pay them for their damages?