South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 7, Problem 2RP
To determine
Explain whether the casualty loss should be deducted while computing Person E’s taxable income of 2017 and 2018.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Esther owns a large home on the Southeast Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In September 2019, a hurricane damaged many of the trees surrounding her home; her region was declared a federal disaster area as a result of the hurricane’s damage. In October 2019, Esther engaged a local arborist to evaluate and treat the trees, but five of the largest trees were seriously weakened by the storm. These trees died from the disease in 2020. Esther has ascertained that the amount of the casualty loss from the death of the five trees is $25,000; however, she is uncertain in which year to deduct this loss. Discuss whether the casualty loss should be deducted in the calculation of Esther’s 2019 or 2020 taxable income.
I want a solution to this problem in a professional way.
Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2019, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable:
Damaged Items
FMV Just Prior to Damage
Original Item Cost (Basis)
Antique poster bed
$
6,000
$
5,000
Pool table
7,000
11,000
Flat-screen TV
700
2,500
Required:
Their homeowner's insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,700. Their AGI for 2019 was $50,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2019?
Jorge and his wife own a beachfront vacation home in Savannah, Georgia. During the year, high winds from a tropical storm shatter a sliding glass door and rain from the storm causes extensive water damage to the kitchen. The Savannah area qualified for federal disaster relief. Fortunately, during a calm in the storm, Jorge is able to board up the door, which limits the water damage to the kitchen. The items damaged in the storm are:
Cost
ValueBefore
ValueAfter
InsuranceProceeds
Kitchen furniture
$2,085
$1,325
$430
$510
TV
265
200
0
115
Refrigerator
1,000
920
90
775
Linoleum flooring
1,645
880
0
470
In addition, Jorge pays $610 to replace the sliding glass door. The insurance company will not reimburse him for the cost of the new door because the old sliding glass door did not meet the company's standards for a hurricane area.
The amount of Jorge's casualty loss before considering any annual limitations that may apply is…
Chapter 7 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Many years ago, Jack purchased 400shares of Canary...Ch. 7 - Scan is in the business of buying and selling...Ch. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 16DQCh. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prob. 19DQCh. 7 - Prob. 20DQCh. 7 - Last year Aleshia identified 15,000 as a...Ch. 7 - Prob. 22CECh. 7 - Prob. 23CECh. 7 - Prob. 24CECh. 7 - Prob. 25CECh. 7 - Prob. 26CECh. 7 - Prob. 27CECh. 7 - Prob. 28CECh. 7 - Prob. 29CECh. 7 - Prob. 30CECh. 7 - Prob. 31CECh. 7 - Prob. 32PCh. 7 - Monty loaned his friend Ned 20,000 three years...Ch. 7 - Sally is in the business of purchasing accounts...Ch. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Prob. 49PCh. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53CPCh. 7 - Prob. 54CPCh. 7 - Prob. 1RPCh. 7 - Prob. 2RP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In May, Rebeccas daughter, Isabella, sustained a serious injury that made it impossible for her to continue living alone. Isabella, who is a novelist, moved back into Rebeccas home after the accident. Isabella has begun writing a novel based on her recent experiences. To accommodate Isabella, Rebecca incurred significant remodeling expenses (widening hallways, building a separate bedroom and bathroom, and making kitchen appliances accessible to Isabella). In addition, Rebecca had an indoor swimming pool constructed so that Isabella could do rehabilitation exercises prescribed by her physician. In September, Isabella underwent major reconstructive surgery in Denver. The surgery was performed by Dr. Rama Patel, who specializes in treating injuries of the type Isabella sustained. Rebecca drove Isabella from Champaign, Illinois, to Denver, a total of 1,100 miles, in Isabellas specially equipped van. They left Champaign on Tuesday morning and arrived in Denver on Thursday afternoon. Rebecca incurred expenses for gasoline, highway tolls, meals, and lodging while traveling to Denver. Rebecca stayed in a motel near the clinic for eight days while Isabella was hospitalized. Identify the relevant tax issues based on this information, and prepare a list of questions you would need to ask Rebecca and Isabella to advise them as to the resolution of any issues you have identified.arrow_forwardGeorge and Emily Cosgrove of Athens, Georgia, recently had a fire in their garage that destroyed two of their cars and did considerable damage to the garage and to the outside of their home. After receiving their reimbursements from their homeowner's and automobile insurance policies, the Cosgroves realized that they were severely underinsured. One vehicle was not insured for fire, and the insurance on their dwelling amounted to only 60 percent of its current replacement value. What do you recommend to George and Emily about managing property and liability risk regarding: 1. The relationship between severity and frequency of loss when deciding whether to buy insurance?arrow_forwardChristopher's main home was damaged by a tornado, and his county was later deemed a federal disaster area. He incurred $80,000 worth of damage to his home, but $65,000 was reimbursed by his homeowner's insurance. His basis in the home was $175,000 at the time of the tornado. Christopher's employer had a disaster relief fund for its employees. He received $5,000 from the fund and spent the entire amount on repairs to his home. What is Christopher's casualty loss (before the calculation of any limitations)? Group of answer choices $0 $10,000 $15,000 $5,000arrow_forward
- Juanita is the owner of a 30-year-old home, and is looking to buy a homeowner’s insurance policy. The previous home she owned was severely damaged by a tree falling through the roof, a peril that was not covered by her basic-form policy, therefore she is looking to buy a comprehensive policy that covers damage from all perils (except those specifically excluded). Based on the peril coverage it offers, she purchases an insurance policy.arrow_forwardFenwick operates a grocery store and his retail building was completely destroyed by a hurricane on August 22, Year 10. The fair market value of the building before the hurricane was $1,200,000 with an adjusted basis of $800,000. His insurance company reimbursed him $1,200,000 of December 2, Year 10. When is the last date that Fenwick can replace this building with qualifying property and avoid recognizing gain from this transaction?arrow_forwardAshby and Curtis, married professionals, have a two-year-old son, Jason. Curtis works full-time as an electrical engineer, but Ashby has not worked outside the home since Jason was born. As Jason is getting older, Ashby thinks that Jason would benefit from attending nursey school several times a week, which would give her an opportunity to reinvigorate her love of painting at a nearby art studio. Ashby thinks that if she is lucky, the proceeds from the sale of her paintings will pay for the nursery school tuition. Ashby also is planning to claim the credit for child and dependent care expenses, because the care provided Jason at the nursery school is required for her to pursue her art career. Can Ashby and Curtis claim the credit for child and dependent car expenses for the nursery school expenditures? Why or why not?arrow_forward
- -Betty is an unmarried attorney. During the year a hurricane completely destroys her home, which had a basis of $60,000. The value of her home before the tornado is $100,000 and the value afterwards is $35,000. Betty's home is located in a federally declared natural disaster area. Her AGI is $50,000. What is the amount that Betty can deduct after limitations? Group of answer choices $29,900. $54,900. $59,900. $65,000.arrow_forwardThe value of Terrah’s personal residence has declined significantly because of a recent forest fire in the area where she lives. Terrah’s house suffered no actual damage during the fire, but because much of the surrounding area was destroyed, the value of all of the homes in the area declined substantially. Discuss whether Terrah can take a casualty loss for the decline in value of her residence caused by the fire.arrow_forwardKaren is the sole owner of a wildly successful small business. However, Karen's financial advisor has told her that her estate would be unable to meet its cash requirements if she were to die today, and the business would have to be sold. Karen, who is a widow with not children, is only 50 and plans to continue running the business for many years. However, she does want to take some action to prevent the possible sale of the business should she die, and prevent future appreciation of the business from inclusion in her gross estate. Karen is very close to one of her nieces, who has shown an interest in and aptitude for the business. Which one of the following actions would be most appropriate to help meet the liquidity needs of Karen's estate and would be consistent with her objectives and situation? A)Karen should enter into a private annuity agreement with her niece regarding the business. B)Karen should convert the business into an S corporation and gift shares in the…arrow_forward
- The Joe and Cindy Jones have been married since 2010. On March 01, 2015, the Jones’ purchased their first home for $438,000. On April 01, 2017, the home sustained substantial damage caused by fire. The insurance company reimbursed them $218,000 for the fire damage, of which, they used $115,000 to restore and repair the damages caused by the fire. The remaining portion of the insurance proceeds was invested in the stock market. On May 28, 2018, the Jones’ sold there home for $954,000, and purchased a new home for $650,000 on July 01, 2018. As a result of Cindy’s employer relocated to Florida, the Jones sold the new home on December 31, 2019, for $1,265,000. What is their recognized gain in 2018 and 2019 from the sale of the old home and new old assuming they used whatever strategy available to them to minimize their tax…arrow_forwardCourney is a licensed architect who works part-time as an architectural consultant. One of Courtney’s clients was interested in building a shopping center on a tract of land she owned in Lincoln County. Courtney inherited the property from her uncle when he died on June 6, 1999. At that time, the land was valued at $40,000. It has since been rezoned for commercial use and has a current value of $200,000. On February 10, 2019, Courtney exchanged the Lincoln parcel for a similar tract in Minnehaha County worth $190,000 and cash of $10,000. How to report this problem on a tax return?arrow_forwardEleanor is the owner of a 15-year-old home, and is looking to buy a homeowner’s insurance policy. She feels it would be overly cautious to purchase protection from all perils, but in addition to protection from fire, vandalism, windstorms, and so on, she also wants insurance for damage caused by malfunctioning of internal structures like air conditioning or plumbing. Based on the peril coverage it offers, she purchases an _________ insurance policy. Her home has a replacement value of $250,000, therefore she insures her home for the minimum legal requirement of __________________. Assuming she does not purchase any additional coverage beyond the legal minimums, complete the following table indicating the maximum dollar value of reimbursement she can receive for each of the following: Damage to personal property: $ _____________________ Detached buildings: $_____________________ Loss of Use (Additional living expenses): $____________________ Property…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENTBusiness Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
How to Calculate your Income Tax? Step-by-Step Guide for Income Tax Calculation; Author: ETMONEY;https://www.youtube.com/watch?v=QdJKpSXCYmQ;License: Standard YouTube License, CC-BY
How to Calculate Federal Income Tax; Author: Edspira;https://www.youtube.com/watch?v=2LrvRqOEYk8;License: Standard Youtube License