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. Zero b. $ 65,000 c. $ 40,000 d. $ 44,900 e. $ 19,900
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. Zero b. $ 65,000 c. $ 40,000 d. $ 44,900 e. $ 19,900
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Zero
b. $ 65,000
c. $ 40,000
d. $ 44,900
e. $ 19,900
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