3. A homeowner’s house is insured at $950,000. The insurer requires 75% coverage for full insurance. The home sustains $25,300 damage from fire. The policy has a deductible of $10,000, which decreases linearly to zero when the total cost of the loss is $20,000. The house is valued at $1,360,000. How much does the insurer reimburse?

3. A homeowner’s house is insured at $950,000. The insurer requires 75% coverage for full insurance. The home sustains $25,300 damage from fire. The policy has a deductible of $10,000, which decreases linearly to zero when the total cost of the loss is $20,000. The house is valued at $1,360,000. How much does the insurer reimburse?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter4: Additional Income And The Qualified Business Income Deduction

Section: Chapter Questions

Problem 24MCQ

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Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $350,000 and insured it (via an HO-5 policy) for $310,000. The policy reimburses for actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a two-year-old television set with a current replacement value of $600 and an estimated useful life of eight years. They also took jewelry valued at $1,850 and silver flatware valued at $3,000. If the Browns’ policy has an 80 percent co-insurance clause, do they have enough insurance? Assuming a 50 percent coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. What advice would you give the Brown family about their homeowner’s coverage?
LO4 Explain why each of the following expenditures is or is not deductible: a. Lumbar, Inc., pays 12,000 as its share of its employees Social Security tax. The 12,000 is deductible. b. Leroy pays a cleaning service 250 per month to clean his real estate office. The 250 is deductible. c. Janice pays a cleaning service 75 per month to clean her personal residence. The 75 is not deductible. d. Leyh Corporation purchases land to use as a parking lot for 35,000. The 35,000 is not deductible. e. Martin spends 50 per month on gasoline for the car he uses to drive to his job as a disc jockey. The 50 is not deductible.
Mandren Inc. has a fire insurance policy from the Blundi Insurance Company with a 90% coinsurance clause based on replacement cost. The replacement cost of the building is $600,000. The face amount of the policy Mandren purchases is $400,000. If a covered loss in the amount of $550,000 occurs, how much will Mandren collect from their insurer?
The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?
Ivy Gordon's home in Charleston was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $36,000. The average age of the damaged personal property was 5 years, and its useful life was estimated to be 13 years. What is the maximum amount the insurance company would pay Ivy, assuming that it reimburses losses on an actual cash-value basis and has a $500 deductible? Assume that the total coverage requirement is met. Do not round intermediate calculations. Round the answer to the nearest cent.
For each of the following situations, what amount would the insurance company pay? (L° L08.2) Wind damage of $1,835; the insured has a deductible of $500. Theft of a stereo system worth $4,000; the insured has a deductible of $500. Vandalism that does $425 of damage to a home; the insured has a deductible of $500.
The Tomlinsons decided to sell their home for $355,000. They are charged a real estate commission of 3.5% of the selling price, title insurance that is 1% of the selling price, and an escrow fee of $900. What amount (in dollars) do the Tomlinsons receive after fees? $ ? What percentage of the selling price was fees? Round your answer to the nearest tenth of a percent. % ?
Ricardo's car was damaged in an accident. The cost to repair the car will be $3,240. His deductible is $500. How much will Ricardo's insurance company pay?
Eva Stone's home in Chicago was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $19,000. The average age of the damaged personal property was 8 years, and its useful life was estimated to be 18 years. What is the maximum amount the insurance company would pay Eva, assuming that it reimburses losses on an actual cash-value basis? Round the answer to the nearest cent.
The Bourassas decide to sell a home for $410,000. They are charged a real estate commission of 7% of the selling price, title insurance that is 1.6% of the selling price, and an escrow fee of $775. (a) What amount (in dollars) do the Bourassas receive after fees? $? (b) What percentage of the selling price was fees? Round to the nearest tenth of a percent. %?
The Tomlinsons decide to sell their home for $345,000. They are charged a real estate commission of 5.5% of the selling price, title insurance that is 1% of the selling price, and an escrow fee of $800. (See Example 2 in this section.) What amount (in dollars) do the Tomlinsons receive after fees? (Enter a number.)$ What percentage of the selling price was fees? Round to the nearest tenth of a percent. (Enter a number.)
Y8 In January of 2022, Molly contracted a student loan of $10,000 to be repaid over 5 years at a rate of 7%, compounded monthly. Payments are monthly. In addition, she incurred eligible moving expenses of $500, paid tuition of $5,000 and earned gross employment income of $21,300 in 2022. What total tax credit will he receive for education-related expenses? Round to the nearest dollar. Select one: a. $1,024 b. $274 c. $900 d. $847