Jenny's personal car was totally destroyed in a hurricane in 2021, the area was declared a Federal disaster area. She originally paid $15,000 for the car. Jenny filed an insurance claim for the car; however, the claim was denied. As a result, Jenny took the deduction for this casualty loss on her 2021 tax return. Her AGI is $50,000 for year 2021. In 2022, the insurance company changed decision and sent Jenny a money order for $10,000. How much, if anything, should Jenny include in her income for 2022 tax return?

Jenny's personal car was totally destroyed in a hurricane in 2021, the area was declared a Federal disaster area. She originally paid $15,000 for the car. Jenny filed an insurance claim for the car; however, the claim was denied. As a result, Jenny took the deduction for this casualty loss on her 2021 tax return. Her AGI is $50,000 for year 2021. In 2022, the insurance company changed decision and sent Jenny a money order for $10,000. How much, if anything, should Jenny include in her income for 2022 tax return?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter6: Losses And Loss Limitations

Section: Chapter Questions

Problem 4CE

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