Taxpayer's home was destroyed by a storm in the current year and the area was declared a disaster area.If the taxpayer elects to treat the loss as having occurred in the prior year,it will be subject to the 10%-of-AGI reduction based on the AGI of the prior year.

Question

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If a taxpayer elects to treat a disaster loss as occurring in the prior year, the 10%-of-AGI reduction is based on the AGI of that prior year.

Taxpayer's Home Was Destroyed by a Storm in the Current