Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Iten Building Equipment Barn Adjusted Basis FMV before Damage FMV after Damage $ 92,100 79,300 118,800 $ 126,900 54,100 183,600 a-1 Loss amount a-2 Last year a-2. Current year 50 e 118,800 Insurance Proceeds $ 57,300 15,400 53,400 Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $62,100 of taxable income last year. Their taxable income for the current year is $201,300, excluding the loss from the hurricane. Required: a-1. Calculate the amount of the loss deductible by Derrick and his wife. a-2. What amount of loss should be adjusted against current and last year?

Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Iten Building Equipment Barn Adjusted Basis FMV before Damage FMV after Damage $ 92,100 79,300 118,800 $ 126,900 54,100 183,600 a-1 Loss amount a-2 Last year a-2. Current year 50 e 118,800 Insurance Proceeds $ 57,300 15,400 53,400 Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $62,100 of taxable income last year. Their taxable income for the current year is $201,300, excluding the loss from the hurricane. Required: a-1. Calculate the amount of the loss deductible by Derrick and his wife. a-2. What amount of loss should be adjusted against current and last year?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter15: Property Transactions: Nontaxable Exchanges

Section: Chapter Questions

Problem 3BCRQ

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Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Item Adjusted Basis FMV before Damage FMV after Damage Insurance Proceeds Building $ 119,100 $ 163,500 $ 0 $ 74,700 Equipment 90,600 66,800 0 17,100 Barn 133,300 212,500 133,300 57,700 Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $46,800 of taxable income last year. Their taxable income for the current year is $155,400, excluding the loss from the hurricane. Required: a-1. Calculate the amount of the loss deductible by Derrick and his wife.a-2. What amount of loss should be adjusted against current and last year?
Problem 6-53 (LO 6-5) Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Item Building Equipment Barn Adjusted Basis FMV before Damage FMV after Damage $ 97,100 $ 129,700 82,300 118,500 55,800 169,500 a-1. Loss amount a-2. Last year a-2. Current year Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $51,300 of taxable income last year. Their taxable income for the current year is $168,900, excluding the loss from the hurricane. $0 0 118,500 Required: a-1. Calculate the amount of the loss deductible by Derrick and his wife. a-2. What amount of loss should be adjusted against current and last year? $ Insurance Proceeds $ 64,500 24,400 34,800 51,300
Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Item Building Equipment Barn Adjusted Basis FMV before Damage FMV after Damage $ 108,900 76,500 103,500 a-1. Loss amount a-2. Last year a-2. Current year $ 148,200 57,000 165, 100 $ $0 0 Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $69,600 of taxable income last year. Their taxable income for the current year is $223,800, excluding the loss from the hurricane. 103,500 Required: a-1. Calculate the amount of the loss deductible by Derrick and his wife. a-2. What amount of loss should be adjusted against current and last year? 69,600 Insurance Proceeds $ 69,600 15,500 43,500
Casualty Losses. Tony is a carpenter who owns his own furniture manufacturing business. During the current year, a tornado (a federally declared disaster) damaged several pieces of equipment and destroyed his delivery truck and his personal automobile, which he often kept in the workshop garage. The asset descriptions and related values are as follows: Adjusted Insurance Basis FMV FMV Cost to Before Casualty After Casualty Repair/Replace $ 8,700 9,000 13,800 32,000 12,000 Asset Proceeds $ 9,000 3,000 15,300 17,500 28,000 $ 3,700 7,800 11,400 16,000 12,000 $4,000 Equipment A Equipment B Equipment C Delivery Truck Automobile $12,300 8,100 Not Available Not Available 18,000 15,000 Although he could not obtain its fair market value after the casualties, Tony decided to repair rather than replace Equipment C. Before considering any deductions because of these casualties, Tony's AGI is $80,000. What deductions may Tony take relating to these losses?
ces Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2022, 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: Damaged Items Antique poster bed Pool table Large flat-screen TV FMV Just Prior to Damage $ 8,600 8,625 1,350 Casualty loss deduction Original Item Cost (Basis) $ 6,300 14,575 4,775 Required: Their homeowner's insurance policy had a $11,755 deductible for the personal property, which was deducted from their insurance reimbursement of $16,275, resulting in a net payment of $4,520. Their AGI for 2022 was $47,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2022?
] In January, a flood which was declared a federal disaster, damaged Danny’s carpeting and furniture. In March, his golf cart was damaged in an accident when it was hit by a car. He was able to establish the following information to determine his losses on these assets. Asset FMV before casualty FMV after casualty Insurance recovery Cost Date purchased Carpet $5,600 $1,100 $2,000 $6,000 10 months ago Furniture 5,500 1,500 3,200 3,000 11 years ago Golf Cart 6,500 2,000 1,500 7,000 8 months ago Danny’s AGI is $32,000 before considering these casualties and he has $12,000 of other itemized deductions. Determine Danny’s deductible casualty loss for 2019.
During the year, Mark had AGI of $30,000 and the following personal casualty losses related to a flood in a Federally declared disaster area: Asset Adjusted FMV Before FMV After Insurance Basis the Casualty the Casualty Recovery A $1,362 $2,139 $0 $487 B $1,648 $2,319 $439 $0 C $1,923 $2,987 $813 $561 How much can Mark deduct as a result of the personal casualty losses related to a flood? Group of answer choices $875 $587 $578 $785
Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2021, 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: Damaged Items Antique poster bed Pool table Large flat-screen TV FMV Just Prior Original Item Cost (Basis) $ 6,100 14,025 4,425 Casualty loss deduction to Damage $ 8,200 8,375 1,250 Required: Their homeowner's insurance policy had a $11,485 deductible for the personal property, which was deducted from their insurance reimbursement of $15,725, resulting in a net payment of $4,240. Their AGI for 2021 was $45,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2021?
Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $6,000 on property that had a $14,000 basis and a decrease in market value of $10,000 due to damage caused by the theft. What is the amount of Virginia's casualty loss? $14,000 $8,000 $10,000 $4,000 None of the above
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?
Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2019, 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: Damaged Items FMV Just Prior to Damage Original Item Cost (Basis) Antique poster bed $ 6,000 $ 5,000 Pool table 7,000 11,000 Flat-screen TV 700 2,500 Required: Their homeowner's insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,700. Their AGI for 2019 was $50,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2019?
Oscar owns a building that is destroyed in a hurricane. His adjusted basis in the building before the hurricane is $130,000. His insurance company pays him $140,000 and he immediately invests in a new building at a cost of $142,000. What is the amount of recognized gain or loss on the destruction of Oscar's building? $0 $10,000 gain $8,000 gain $12,000 gain $2,000 loss