Question

Danny’s living room furniture and his flat screen television were damaged in a fire in his home in January. In March, his golf cart was damaged in a flood. 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
Television	$4,600	$1,100	$2,000	$5,000	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 $37,000 before considering these casualties and he has $12,000 of other itemized deductions.

Determine Danny’s deductible casualty loss if the events occurred in 2017.

How would your answer change if these events happened in 2018?

Answer 1

If in 2017

Asset	FMV Before Casualty	FMV After Casualty	Decrease in FMV	Insurance recovery	Loss
	A	B	C=A-B	D	E=C-D
Television	$   4,600.00	$1,100.00	$3,500.00	$2,000.00	$   1,500.00
Furniture	$   5,500.00	$1,500.00	$4,000.00	$3,200.00	$      800.00
Golf Cart	$   6,500.00	$2,000.00	$4,500.00	$1,500.00	$   3,000.00
Total					$   5,300.00
Less:	$100 per Loss event				$      300.00
Less:	10% of AGI (37000*10%)				$   3,700.00
		Deductible Casualty Loss			$   1,300.00

If in 2018, then the personal casualty and theft loss deduction isn't available, except for casualty losses incurred in a federally declared disaster

answered by: anonymous