None A storm swept through the wine cellar of a restaurant, completely destroying very expensive wines worth$900,000. The adjusted basis of the wines was $500,000. The pending insurance company claim was for$450,000. What deduction, if any, can the restaurant take in the year of the casualty?O A. $0O B. $50,000C. $400,000OD. $450,000

How to determine the restaurant's deduction in this scenario:Casualty Loss: The storm damage is…

Answered: A storm swept through the wine cellar…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter10: Protecting Your Property

Section: Chapter Questions

Problem 4FPE

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ces Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2022, 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 Antique poster bed Pool table Large flat-screen TV FMV Just Prior to Damage $ 8,600 8,625 1,350 Casualty loss deduction Original Item Cost (Basis) $ 6,300 14,575 4,775 Required: Their homeowner's insurance policy had a $11,755 deductible for the personal property, which was deducted from their insurance reimbursement of $16,275, resulting in a net payment of $4,520. Their AGI for 2022 was $47,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2022?
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Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2021, 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 Antique poster bed Pool table Large flat-screen TV FMV Just Prior Original Item Cost (Basis) $ 6,100 14,025 4,425 Casualty loss deduction to Damage $ 8,200 8,375 1,250 Required: Their homeowner's insurance policy had a $11,485 deductible for the personal property, which was deducted from their insurance reimbursement of $15,725, resulting in a net payment of $4,240. Their AGI for 2021 was $45,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2021?

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