In: Accounting
John bought a car three years ago for $20,000 for personal use. In 2002, his car was totally destroyed by a tree that fell on the car. John did not have insurance that covered this event. The car’s fair market value before the tree came down was $9,000 and it was worth $0 after the accident. He has no other personal casualty gains or losses and his AGI for the year was $50,000. John’s personal casualty loss is $8,000. True/False and Explain.
False
loss caused =9000
persona casulty loss =9000-(100-10% of AGI)
=9000-100-5000
=3900
To calculate the casualty loss deduction for personal-use property in an area declared a federal disaster, you must take the following three steps:
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