Question

Charlotte sustained a $5,000 casualty loss due to a severe storm. She also incurred a $1,500 loss from a theft in the same year. Both the casualty and theft involved personal-use property. The losses were not due to her area being declared a Federal Disaster Area. Charlotte's AGI for the year is $26,000 and she does not have insurance coverage. Charlotte's deductible casualty loss for 2018 is

A) $0

B) $2,200.

C) $2,600.

D) $4,800.

Answer 1

Ans: Calculation of Casuality loss:

Loss from svere storm	$5,000
Less: $100 limit	($100)
Loss after $100 limit	$4,900

Loss from theft	$1,500
Less: $100 limit	($100)
Loss after $100 limit	$1,400

Total casuality loss = $4,900+$1,400

Total casuality loss = $6,300

Total casuality loss	$6,300
Less: 10% OF AGI limit($26,000*10%)	($2,600)
Deductible casulaity loss	$3,700

Charlotte's deductible casuality loss for 2018 is $3,700.

Note: I can't find the answer in the above options. The answer for this question should be $3,700.

Thank you,

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