Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2021, 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 Just Prior Original ItemCost (Basis)$ 6,10014,0254,425Casualty loss deductionto Damage$ 8,2008,3751,250Required:Their homeowner's insurance policy had a $11,485 deductible for the personal property, which was deducted from their insurancereimbursement of $15,725, resulting in a net payment of $4,240. Their AGI for 2021 was $45,000. What is the amount of casualty lossthat Reynaldo and Sonya can claim on their joint return for 2021?

Damaged itemsFMV just prior to damage (a)Original item cost (basis) (b)Actual loss (Lesser of a or…

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

See similar textbooks

Similar questions

Igor owns a rental house and had to paint the living room, kitchen and bathroom after the most recent tenant moved out. The rooms had not been painted in the last five years and he worried he would not be able to rent it out to another tenant at the current fair market value if he didn’t repaint. The cost to repaint the three rooms was $1,500 ($1,000 labor and $500 paint). What amount, if any, can Igor deduct of this expense and on what form should it be listed?
Please Explain Proper And Show All Step Do Not Give Solution In Image Format And Thanks In Advance
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?
Blossom Inc. recently replaced a piece of automatic equipment at a net price of $3,500, f.o.b. factory. The replacement was necessary because one of Blossom’s employees had accidentally backed his truck into Blossom’s original equipment and made it inoperable. Because of the accident, the equipment had no resale value to anyone and had to be scrapped. Blossom’s insurance policy provided for a replacement of its equipment and paid the price of the new equipment directly to the new equipment manufacturer, minus the deductible amount paid to the manufacturer by Blossom. The $3,500 that Blossom paid was the amount of the deductible that it has to pay on any single claim on its insurance policy. The new equipment represents the same value in use to Blossom. The used equipment had originally cost $64,000. It had a book value of $45,000 at the time of the accident and a second-hand market value of $50,000 before the accident, based on recent transactions involving similar equipment. Freight…
Please explain Pizza corporation factory was destroyed by a hurricane. The fair market value of the factory at the time of the hurricane was $500,000 and its adjusted basis was $750,000. Pizza received insurance proceeds of $620,000, which it used to immediately buy a new factory. What gain or loss will pizza recognize related to the factory in the current year? $120,000 gain $250,000 loss No gain or loss $130,000 loss
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 home was acquired for $83,000 in 2005. On May 12, 2021, the Arcs installed new fixtures (7-year recovery period) at a cost of $3,400. They wish to maximize the cost recovery on the new fixtures but make no elections. how do I calculate Special depreciation allowance for qualified property Rental income Insurance Interest expense Property taxes Miscellaneous expenses $16,100 800 5,750 1,200 500
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?
-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.
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

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS