Leo bought a used car for $4,500. While in class at George Brown, his car was damaged by an unidentified automobile. The damage to the vehicle was estimated at $1,000. If the cash value of Leo's car at the time of the loss is $3,000, how much money would Leo receive if he files a claim for damages? Assume he has an Ontario Automobile Insurance policy with a $500 deductible and all perils coverage. $3,000 $2,500 $1,000 $500 None of the above. He's not covered.
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- Chad owned an office building that was destroyed in a tornado. The area was declared a Federal disaster area. The adjusted basis of the building at the time was 890,000. After the deductible, Chad received an insurance check for 850,000. He used the 850,000 to purchase a new building that same year. How much is Chads recognized loss, and what is his basis in the new building?On July 24 of the current year, Sam Smith was involved in an accident with his business use automobile. Sam had purchased the car for 30,000. The automobile had a fair market value of 20,000 before the accident and 8,000 immediately after the accident. Sam has taken 20,000 of depreciation on the car. The car is insured for the fair market value of any loss. Because of Sams history, he is afraid that if he submits a claim, his policy will be canceled. Therefore, he is considering not filing a claim. Sam believes that the tax loss deduction will help mitigate the loss of the insurance reimbursement. Sams current marginal tax rate is 35%. Write a letter to Sam that contains your advice with respect to the tax and cash flow consequences of filing versus not filing a claim for the insurance reimbursement for the damage to his car. Also prepare a memo for the tax files. Sams address is 450 Colonels Way, Warrensburg, MO 64093.Megan crashed her car into another vehicle. The damage to her car cost $2,568 to repair. Damage to the other vehicle cost $6,820. Megan's collision coverage has a $1,000 deductible. Her property damage liability is $5,000. How much will her insurance company pay for repairs?
- Fenwick operates a grocery store and his retail building was completely destroyed by a hurricane on August 22, Year 10. The fair market value of the building before the hurricane was $1,200,000 with an adjusted basis of $800,000. His insurance company reimbursed him $1,200,000 of December 2, Year 10. When is the last date that Fenwick can replace this building with qualifying property and avoid recognizing gain from this transaction?Raymond has $12,000 worth of property damage insurance and a $1,200 deductible collision insurance policy. He had a tire blowout while driving and crashed into a $1,500 brick wall. The crash caused $3,800 in damages to his car. a. How much will the insurance company pay for the brick wall? b. How much will the insurance company pay for the damage to the car? $ 27Joe Berry, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Joe was at fault in an accident that caused $2,100 damage to the other auto and $800 damage to his own. Also, the courts awarded $14,000 and $9,000, respectively, to the two passengers in the other car for personal injuries. How much will the insurance company pay, and what is Joe’s share of the responsibility?
- Roger Laut, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $1,000 deductible. Roger was at fault in an accident that caused $4,800 damage to the other car and $8,800 damage to his own car. Also, the courts awarded $19,000 and $9,000, respectively, to the two passengers in the other car for personal injuries. How much does the insurance company pay, and what is Roger’s share of the responsibility? Insurance company pays Roger paysRusty Reft, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Rusty was at fault in an accident that caused $3,400 damage to the other auto and $1,100 damage to his own. Also, the courts awarded $14,800 and $7,200, respectively, to the two passengers in the other car for personal injuries. a. How much will the insurance company pay? Amount paid b. What is Rusty's share of the responsibility? Amount paid2. Donald owns a car repair business. Hoodlums broke into his shop at night and stole his personal vehicle, which was there being repaired. His vehicle’s FMV before being stolen was 25,000 and FMV after was zero. The cost to replace his vehicle was 19,000, which is the amount he received in insurance proceeds. Donald’s AGI is $90,000. What deduction can Donald take on his 1040 due to the break-in? 0 6000 19000 25000
- 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?When Carolina's house burned down, she lost household items worth a total of $55,000. Her house was insured for $160,000 and her homeowner's policy provided coverage for personal belongings up to 55 percent of the insured value of the house. (a) Calculate how much insurance coverage Carolina's policy provides for her personal possessions. Amount of insurance coverage (b) Will Carolina be reimbursed in full for her household items? O Yes O NoMarika Katz bought a new Blazer and insured it with only compulsory insurance 10/20/5. Driving up to her summer home one evening, Marika hit a parked car and injured the couple inside. Marika’s car had damage of $9,600, and the car she struck had damage of $7,900. After a lengthy court suit, the couple struck were awarded personal injury judgments of $15,900 and $6,900, respectively. What will the insurance company pay for this accident? What is Marika’s responsibility?