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Irina's personal-use residence was destroyed in a fire in 2020. The fire was deemed a federally-declared...

Irina's personal-use residence was destroyed in a fire in 2020. The fire was deemed a federally-declared disaster, but it is not a qualified disaster loss. Irina originally purchased the home for $250,000, and she has not made any capital improvements. Before the fire, the house was worth $500,000. After the fire, the house was worth $200,000. Irina received insurance proceeds of $200,000 as a result of the damage to the house. What amount can Irina deduct in 2020 as a result of her loss? Irina's adjusted gross income in 2020 is $50,000 and her adjusted gross income for 2021 is expected to be $55,000. Irina will itemize her deductions.

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ANSWER:

Asper tax year 2019

There are three types of casualty losses. it is federal casualty loss. although it is not qualified disaster loss, irina will be allowed casuality loss deduction.

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