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Itemized Deduction5
Casulty and Theft Loss
| Question | Answer |
|---|---|
| What characteristics must an event have to qualify as a casualty or theft | A casualty or theft is the result of an identifiable event of a sudden,unexpected, or unusual nature |
| What types of damage or destruction qualify as casualties or thefts | Severe weather,flood,fire,accident, earth-quake, vandalism,terrorist attack,tidal wave,and unlawful taking of property |
| Name some types of losses that woul not qualify as a casualty or theft | Damages paid for injury to another person or property owned by another person,damages caused through ordinary use, or by di-sease,insects,or progressive deterior-ation,and loss or disappearance of property without evidence a casualty or theft occurred |
| By what amounts must all casualty and theft losses of personal-use property be reduced | such losses must be reduced by(1)insurance and other reimbursements(2)$100 and (3)10% of AGI |
| May a taxpayer claim a casulty loss for unisured damages to his dependent teenager's car if the car is registerd in the depend-ent's name | No |
| If the car is registered jointly in the taxpayer's and dependent's names | Yes |
| What information must you obtain to determine the amount of a casualty or theft loss | The adjusted basis and the FMV of the property before and after the casualty or theft |
| What can be used as a measure of the decrease in FMV | The cost of necessary clean-up or repairs to the property to return it to the condition it was in immediately before the casualty |
| What is the allowable loss | The lesser of the adjusted basis or the decrease in FMV |
| In what year is a casualty or theft loss deducted | Generally in the year in which the casualty or theft occurred.However a casualty loss from a disaster occurring in an area the president declares warrants federal assist-ance may be deducted for the year of loss or by amending the previous year's return |
Created by:
dawn2000
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