Question
In: Accounting
On July 24 of the current year, Sam Smith was involved in an accident with his...
On July 24 of the current year, Sam Smith was involved in an accident with his business use automobile. Sam had purchased the car for $30,000. The automobile had a fair market value of $20,000 before the accident and $8,000 immediately after the accident. Sam has taken $20,000 of depreciation on the car. The car is insured for the fair market value of any loss. Because of Sam's history, he is afraid that if he submits a claim, his policy will be canceled. Therefore, he is considering not filing a claim. Sam believes that the tax loss deduction will help mitigate the loss of the insurance reimbursement. Sam's current marginal tax rate is 35%. Write a letter to Sam that contains your advice with respect to the tax and cashflow consequences of filing versus not filing a claim for the insurance reimbursement for the damage to his car. Also prepare a memo for the tax files. Sam's address is 450 Colonel's Way, Warrensburg, MO 64093.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
On July 24 of the current year, Sam Smith was involved in an accident with his...
On July 24 of the current year, Sam Smith was involved in an
accident with his business use automobile. Sam had purchased the
car for $30,000. The automobile had a fair market value of $20,000
before the accident and $8,000 immediately after the accident. Sam
has taken $20,000 of depreciation on the car. The car is insured
for the fair market value of any loss. Because of Sam's history, he
is afraid that if he submits a claim, his policy...
As Steve was driving to work, his car was involved in an accident caused by a...
As
Steve was driving to work, his car was involved in an accident
caused by a speeding driver that ran a stop sign and crashed into
her car. Steve has collision insurance on his car with a $500
deductible. The repair costs total $6500 for Steve's car.
1.
If Steve files a claim with the insurer, can he also collect
payments from the negligent driver's insurer? Explain your
answer.
2.
Explain the principles of subrogation and indemnity as they apply...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C was wearing a...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C
was wearing a seatbelt; air bag was activated. Mr. C was airlifted
to the nearest trauma 1 hospital. Injuries included 3 broken ribs,
broken sternum, broken left femur, contusions, open scalp wound of
4 cm. N/G tube was inserted. No previous medical history. (Topics
covered: calculating basic IV drip rates on an infusion pump,
determining hours an IV will run, adding medications to continuous
IVs, enteral feeding,...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C was wearing a...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C
was wearing a seatbelt; air bag was activated. Mr. C was airlifted
to the nearest trauma 1 hospital. Injuries included 3 broken ribs,
broken sternum, broken left femur, contusions, open scalp wound of
4 cm. N/G tube was inserted. No previous medical history. (Topics
covered: calculating basic IV drip rates on an infusion pump,
determining hours an IV will run, adding medications to continuous
IVs, enteral feeding,...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C was wearing a...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C
was wearing a seatbelt; air bag was activated. Mr. C was airlifted
to the nearest trauma 1 hospital. Injuries included 3 broken ribs,
broken sternum, broken left femur, contusions, open scalp wound of
4 cm. N/G tube was inserted. No previous medical history. (Topics
covered: calculating basic IV drip rates on an infusion pump,
determining hours an IV will run, adding medications to continuous
IVs, enteral feeding,...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C was wearing a...
Ray Chan, age 24, is involved in a multiple car accident. Mr. C
was wearing a seatbelt; air bag was activated. Mr. C was airlifted
to the nearest trauma 1 hospital. Injuries included 3 broken ribs,
broken sternum, broken left femur, contusions, open scalp wound of
4 cm. N/G tube was inserted. No previous medical history. (Topics
covered: calculating basic IV drip rates on an infusion pump,
determining hours an IV will run, adding medications to continuous
IVs, enteral feeding,...
Ignacio was involved in an auto accident in which he was at fault. His own car...
Ignacio was involved in an auto accident in which he was at fault.
His own car sustained $3,827 damages and the other vehicle cost
$1,709 to repair. Ignacio was not injured, but the driver of the
other car required medical treatment costing 34,550 and the
passangers injuries totaled $3,944. Ignacio's policy includes
15/30/10 liabilty, $250 deductible collision and $100 deductible
comprehensive. How much of the damages must the insurance company
pay?
a.$
24,230
b.$
30,000
c.$
43,680
d.$
21,840
Reza is a 23-year-old male who was involved in a motor vehicle accident. After the accident,...
Reza is a 23-year-old male who was involved in a motor vehicle
accident. After the accident, he told the paramedics he felt
extreme pain under his rib cage. He was transported by ambulance to
the hospital, and the attending physician determined Reza had
ruptured his spleen during the accident. He was scheduled for
emergency splenectomy. Due to the severity of the injury, Reza had
to have “open surgery” to remove his spleen.
The surgery was a success. Reza was given...
Reza is a 23-year-old male who was involved in a motor vehicle accident. After the accident,...
Reza is a 23-year-old male who was involved in a motor vehicle
accident. After the accident, he told the paramedics he felt
extreme pain under his rib cage. He was transported by ambulance to
the hospital, and the attending physician determined Reza had
ruptured his spleen during the accident. He was scheduled for
emergency splenectomy. Due to the severity of the injury, Reza had
to have “open surgery” to remove his spleen.
The surgery was a success. Reza was given...
Reza is a 23-year-old male who was involved in a motor vehicle accident. After the accident,...
Reza is a 23-year-old male who was involved in a motor vehicle
accident. After the accident, he told the paramedics he felt
extreme pain under his rib cage. He was transported by ambulance to
the hospital, and the attending physician determined Reza had
ruptured his spleen during the accident. He was scheduled for
emergency splenectomy. Due to the severity of the injury, Reza had
to have “open surgery” to remove his spleen.
The surgery was a success. Reza was given...
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