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Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2020, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable: FMV Just Prior to Damage $ 7,200 Original Item Cost (Basis) $ 5,600 Damaged Items Antique poster bed Pool table Flat-screen TV 7,750 1,000 12,650 3,550 Required: Their homeowner's insurance policy had a $10,810 deductible for the personal property, which was deducted from their insurance reimbursement of $14,350, resulting in a net payment of $3,540. Their AGI for 2020 was $40,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2020?

Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2020, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable: FMV Just Prior to Damage $ 7,200 Original Item Cost (Basis) $ 5,600 Damaged Items Antique poster bed Pool table Flat-screen TV 7,750 1,000 12,650 3,550 Required: Their homeowner's insurance policy had a $10,810 deductible for the personal property, which was deducted from their insurance reimbursement of $14,350, resulting in a net payment of $3,540. Their AGI for 2020 was $40,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2020?

FINANCIAL ACCOUNTING
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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Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2020, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable: FMV Just Prior to Damage $ 7,200 7,750 1,000 Original Item Cost (Basis) $ 5,600 12,650 3,550 Damaged Items Antique poster bed Pool table Flat-screen TV Required: Their homeowner's insurance policy had a $10,810 deductible for the personal property, which was deducted from their insurance reimbursement of $14,350, resulting in a net payment of $3,540. Their AGI for 2020 was $40,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2020? Casualty loss deduction
Transcribed Image Text:Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2020, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable: FMV Just Prior to Damage $ 7,200 7,750 1,000 Original Item Cost (Basis) $ 5,600 12,650 3,550 Damaged Items Antique poster bed Pool table Flat-screen TV Required: Their homeowner's insurance policy had a $10,810 deductible for the personal property, which was deducted from their insurance reimbursement of $14,350, resulting in a net payment of $3,540. Their AGI for 2020 was $40,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2020? Casualty loss deduction
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