Question

Alex and Alexa, both age 48, are married filing jointly. They have the following items for...

Alex and Alexa, both age 48, are married filing jointly. They have the following items for 2019:

Salary

$200,000

Casualty loss on business property

15,000

Rental income received

20,000

Net capital loss from stock transactions

5,000

Alimony paid to Alexa’s ex, agreement dated 6/30/18

12,000

Personal casualty losses (assume Federally declared disaster area)

27,000

Personal casualty gains

3,000

a. Compute Adjusted Gross Income (AGI). Label each item you list!​

​b. Compute their net deductible personal casualty loss, if any.​
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Answer #1

a. Computation of Adjusted Gross Income

Salary $2,00,000

Casualty loss on business property ($15,000)

Rental income received $20,000

Net capital loss from stock transactions ($5,000)

Alimony paid to Alexa’s ex ($12,000)

Personal casualty losses ($27,000)

Personal casualty gains $3,000

Adjusted Gross Income $1,64,000

b.Computation of net deductible personal casualty loss

Net casualty loss from these qualified disasters doesn't need to exceed 10% of your adjusted gross income to qualify for the deduction

That is,

  Net deductible personal casualty loss = $1,64,000*0.10

= $16,400

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