Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 8, Problem 17MCQ
Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $6,000 on property that had a $14,000 basis and a decrease in market value of $10,000 due to damage caused by the theft. What is the amount of Virginia's casualty loss?
- $14,000
- $8,000
- $10,000
- $4,000
- None of the above
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $5,000 on property that had a $14,000 basis and a decrease in market value of $10,000 due to damage caused by the theft. What is the amount of Virginia's casualty loss?
a.$4,000
b.$5,000
c.$14,000
d.$10,000
e.None of these choices are correct.
When Carolina's house burned down, she lost household items worth a total of $55,000. Her house was insured for $160,000 and her
homeowner's policy provided coverage for personal belongings up to 55 percent of the insured value of the house.
(a) Calculate how much insurance coverage Carolina's policy provides for her personal possessions.
Amount of insurance coverage
(b) Will Carolina be reimbursed in full for her household items?
O Yes
O No
Ivy Gordon's home in Charleston was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $36,000. The average age of the damaged personal property was 5 years, and its useful life was estimated to be 13 years. What is the maximum amount the insurance company would pay Ivy, assuming that it reimburses losses on an actual cash-value basis and has a $500 deductible? Assume that the total coverage requirement is met. Do not round intermediate calculations. Round the answer to the nearest cent.
Chapter 8 Solutions
Income Tax Fundamentals 2020
Ch. 8 - Alice purchases a rental house on August 22,2019,...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - James purchased office equipment for his business....Ch. 8 - Which of the following statements with respect to...Ch. 8 - Which of the following is not true about the MACRS...Ch. 8 - On July 20,2019, Kelli purchases office equipment...Ch. 8 - Which of the following is not considered a limit...Ch. 8 - In 2019, Ben purchases and places in service a new...Ch. 8 - In 2019, Ben purchases and places in service a new...
Ch. 8 - Prob. 11MCQCh. 8 - Prob. 12MCQCh. 8 - Prob. 13MCQCh. 8 - In 2019, Mary sells for $24,000 a machine used in...Ch. 8 - Prob. 15MCQCh. 8 - Prob. 16MCQCh. 8 - Virginia has business property that is stolen and...Ch. 8 - Pat sells land for $25,000 cash and a $75,000...Ch. 8 - Prob. 19MCQCh. 8 - Prob. 20MCQCh. 8 - Oscar owns a building that is destroyed in a...Ch. 8 - Prob. 22MCQCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - 3. Mike purchases a new heavy-duty truck (5-year...Ch. 8 - On March 8,2019, Holly purchased a residential...Ch. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Calculate the following: The first year of...Ch. 8 - During 2019, William purchases the following...Ch. 8 - On February 2,2019, Alexandra purchases a personal...Ch. 8 - On September 14,2019, Jay purchased a passenger...Ch. 8 - Tom has a successful business with $100,000 of...Ch. 8 - Prob. 14PCh. 8 - Annie develops a successful tax practice. She...Ch. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21P
Additional Business Textbook Solutions
Find more solutions based on key concepts
How did the recession of 2007-2009 compare with other recessions since the Great Depression in terms of length?...
Foundations of Financial Management
11-9. Identify a company with a product that interests you. Consider ways the company could use customer relati...
Business Essentials (12th Edition) (What's New in Intro to Business)
Mary Williams, owner of Williams Products, is evaluating whether to introduce a new product line. After thinkin...
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
How is activity-based costing useful for pricing decisions?
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (12th Edition)
Assume you are a CFO of a company that is attempting to race additional capital to finance an expansion of its ...
Financial Accounting, Student Value Edition (5th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Oscar owns a building that is destroyed in a hurricane. His adjusted basis in the building before the hurricane is $130,000. His insurance company pays him $140,000 and he immediately invests in a new building at a cost of $142,000. What is the amount of recognized gain or loss on the destruction of Oscar's building? $0 $10,000 gain $8,000 gain $12,000 gain $2,000 lossarrow_forwardWhich of the following items are exclusions from gross income? a. Alimony payments received (relates to a divorce settlement in 2016). b. Damages award received by the taxpayer for personal physical injurynone were for punitive damages. c. A new golf cart won in a church raffle. d. Amount collected on a loan previously made to a college friend. e. Insurance proceeds paid to the taxpayer on the death of her uncleshe was the designated beneficiary under the policy. f. Interest income on City of Chicago bonds. g. Jury duty fees. h. Stolen funds the taxpayer had collected for a local food bank drive. i. Reward paid by the IRS for information provided that led to the conviction of the taxpayers former employer for tax evasion. j. An envelope containing 8,000 found (and unclaimed) by the taxpayer in a bus station.arrow_forwardEva Stone's home in Chicago was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $19,000. The average age of the damaged personal property was 8 years, and its useful life was estimated to be 18 years. What is the maximum amount the insurance company would pay Eva, assuming that it reimburses losses on an actual cash-value basis? Round the answer to the nearest cent.arrow_forward
- Explain why the loss resulting from the sale of a computer in the following three situations is treated differently for income tax purposes:a. Monica sells her personal computer at a loss of $1,300. None of the loss is deductible.b. Omar sells a computer used in his carpeting business at a loss of $4,300. The loss is fully deductible.c. Jerry sells his computer at a loss of $3,800. Jerry used the computer to keep track of his investment portfolio. Only $3,000 of the loss is deductible.arrow_forwardCarolina's house burned and she lost household items worth a total of $50,000. House insured for $160,000, homeowner's policy coverage personal belongings up to 55% of insured value of the house.Calculate how much insursance coverage policy provides personal belongings and will she recieve payment for belongings?arrow_forwardLeigh sued an overzealous bill collector and received the following settlement: Damage to her automobile that the collector attempted to repossess $3,300 Physical damage to her arm caused by the collector $15,000 Loss of income while her arm was healing $6,000 Punitive damages $80,000 Question Content Area a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income. Included in/Excluded fromIncome • Damage to her automobile that the collector attempted to repossess • Physical damage to her arm caused by the collector • Loss of income while her arm was healing • Punitive damages Question Content Area b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?arrow_forward
- Elena purchased a living room set for $3,500. Elena’s home and the contents were destroyed by a fire. At the time of the loss, the living room set was worth $2,100 due to depreciation. Comparable replacement furniture will cost $4,000. If the living room set was insured on an actual cash value basis, how much will Elena collect for this loss? Assume a $250 deductible applies to the loss settlement.arrow_forward2. Jordan has some damages on his business property when tornado hit his area. Her truck was used 100 percent for business use in her sole proprietorship. The truck had originally cost $35,000 and she had taken $5,000 depreciation. At the time of the disaster, it was worth $25,000. After the accident, it was $0. She received insurance company's payment of $20,000. How much is her deducible casualty loss? What is her deductible casualty loss if the truck's residual value was $5,000? 3. Fill in the blanks on the following like-kind exchanges Boot FMV of Adjusted basis of given new asset old asset a. b. 17000 15000 4000 C. d. 16000 e. 7000 0 0 6000 0 0 14000 29000 8000 28000 12000 Boot Realized received Gain/(loss) 0 0 500 0 4000 Recognized Postponed gain/loss Gain/loss New basis of received propertyarrow_forwardLO.1 A list of the items that Faith sold and the losses she incurred during the current tax year is as follows: Yellow, Inc. stock $ 1,600Faith’s personal use SUV 8,000Faith’s personal residence 10,000City of Newburyport bonds 900She also had a theft loss of $1,500 on her uninsured business use car. Calculate Faith’s deductible losses.arrow_forward
- 1. Tim loaned a friend $4,000 to buy a used car. In the current year, Tim's friend declares bankruptcy and the debt is considered totally worthless. What amount may Tim deduct on his individual income tax return for the current year as a result of the worthless debt, assuming he has no other capital gains or losses for the year? a.$3,000 short-term capital loss b.$4,000 short-term capital loss c.$3,000 ordinary loss d.$4,000 ordinary loss e.$2,000 short-term capital loss 2. An asset's adjusted basis is computed as: a.Original basis − capital improvements + accumulated depreciation. b.Original basis + capital improvements − accumulated depreciation. c.Original basis + capital improvements + gain or loss realized. d.Original basis + capital improvements + accumulated depreciation. e.None of these choices are correct. 3. Sol purchased land as an investment on January 12, 2018 for $85,000. On January 31, 2021 Sol sold the land for $90,000 cash. What is the nature of the gain or loss?…arrow_forward5arrow_forwardYou have an HO policy with the following limits: A $75,000 (dwelling) B-$ 7,500 (other structures) C-$25,000 (personal property). A tornado strikes your property. You lose your house, which is worth $65,000 at the time of the loss. You also lose an unattached shed worth $8,000, and personal property worth $30,000. You will collect? (assume $0 deductible, ignore the ACV calculation and assume there is no fraud or other unusual circumstances surrounding the loss.) OA$107,500 OB. $97,500 OC.$103,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Operating Loss Carryback and Carryforward; Author: SuperfastCPA;https://www.youtube.com/watch?v=XiYhgzSGDAk;License: Standard Youtube License