Question

# Charlotte sustained a \$5,000 casualty loss due to a severe storm. She also incurred a \$1,500...

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.

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,

feel free to comment incase you need further help.

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