BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
Deductions for the loss are those allowable or standard deductions which the taxpayer is allowed to deduct from the gross income of the particular accounting year. The deductions for the loss have certain conditions and limits over which the deduction of loss is computed.
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