Which of the following statements is true of the tax treatment of uninsured losses? A. It’s...

Which of the following statements is true of the tax treatment of uninsured losses?

A. It’s the same as the financial reporting of uninsured losses.

B. It allows for a firm to choose when the loss will be deducted.

C. It’s the same for insurance companies and non-insurance companies.

D. It requires that the loss be deducted in the year it’s paid.

Solutions

Expert Solution

A. It’s the same as the financial reporting of uninsured losses.

The financial reporting of uninsured losses is performed in the year in which loss occurred. The loss is reported in the tax Form also in the year in which losses occurred. Hence option B is wrong since the firm cannot choose the year of reporting. Option C is irrelvant since it is not a insured loss. Option D is incorrect since loss is not deducted in the year of payment but in the year of occurrence.

jeff jeffy answered 1 year ago

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