cesReynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2022, which wasdeclared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The followingitems were completely destroyed and not salvageable:Damaged ItemsAntique poster bedPool tableLarge flat-screen TVFMV JustPrior toDamage$ 8,6008,6251,350Casualty loss deductionOriginalItem Cost(Basis)$ 6,30014,5754,775Required:Their homeowner's insurance policy had a $11,755 deductible for the personal property, which was deducted from their insurancereimbursement of $16,275, resulting in a net payment of $4,520. Their AGI for 2022 was $47,000. What is the amount of casualty lossthat Reynaldo and Sonya can claim on their joint return for 2022?

A casualty loss deduction is a tax benefit that allows individuals to reduce their taxable income…

Answered: Reynaldo and Sonya, a married couple,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Last year, Jose and Josefina Munoz bought a home with a dwelling replacement value of $250,000 and insured it (via an HO-5 policy) for $225,000. The policy reimburses actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a new computer with a current replacement value of $1,500 and an estimated useful life of three years. They also took jewelry valued at $2,500 and a coin collection valued at $1,500. If the Munozs’ policy has a 90 percent co-insurance clause, do they have enough insurance? Assuming a 50 percent coverage C limit, calculate how much the Munoz family would receive if they filed a claim for the stolen items. What advice would you give the Munoz family about their homeowner’s coverage?
Oswald, while walking down the street, is hit by a reckless driver. Oswald sues the driver and recovers the following damages: $20,000 to reimburse Johnny for medical expenses previously incurred (but not previously deducted), $10,000 for pain and suffering, $5,000 for emotional distress stemming from the accident, and $2,500 in punitive damages How much of Oswald's recovery is included in gross income?
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
Your client, a carpenter, donated one of his handcrafted wooden desks to his church, a qualified public charity. The church sold the desk at an auction for $3,500, which is comparable to the standard price for the client's other woodwork. He calculated his costs as follows: Wood $1,000 Other materials $300 Rent for workshop $500 Time and services $1,700 This is his only charitable contribution. He itemizes deductions and has an adjusted gross income of $80,000. What is the maximum current year income tax deduction allowable for the client's charitable contribution? A)$3,500 B)$1,800 C)$500 D)$1,300
The City of Greenville condemned 300 acres of Kayla's farmland. Kayla's land was worth $250,000 and her basis was $62,500. In payment to Kayla, the city gave Kayla 500 acres of similar land. An appraisal indicated that the land Kayla received was worth $265,000. What is Kayla's recognized gain or loss on the involuntary conversion and what is her basis in the land received?
Which of the following items would not automatically be covered under an HO-3 form? the insured’s driveaway, if damaged by falling object The insured’s pedigreed collie valued at $6000 or $7000 A lawnmower in the insured’s garage personal property of the insured’s daughter who is away from college
Alan owns a ranch in Kansas. During the year, a tornado damaged one of his barns and destroyed some equipment. The following information provides the details of the losses Alan suffered from the tornado. Adjusted Basis FMV Before FMV After Insurance Proceeds Barn $ 75,000 $ 90,000 $ 40,000 $ 30,000 Bailer $ 25,000 $ 15,000 $ 0 $ 15,000 Truck $ 15,000 $ 18,000 $ 0 $ 10,000 How much loss from the tornado can he deduct on his tax return for the current year?
-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.
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If a homeowner's insurance had a replacement cost policy that covered damage to the home and the home was completely destroyed, what amount would the insurance company cover based on the following: - home depreciated value before the damage was $100,000 - home value to rebuild is $150,000 - home mortgage $120,000 - value of neighbour's home $130,000

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