Which of the following statements is accurate?

Question

Quizplus · Accepted Answer

Payments as reimbursement for property losses are not taxable, and they are not considered income, so they do not need to be reported on your tax return. However, if the reimbursement exceeds the cost basis of the property, the excess may be subject to capital gains tax. Payment for property losses is different from deduction, which is a reduction in taxable income, so statement B is incorrect. Statement C is also incorrect because property losses can be tax deductible if they meet certain criteria, such as losses from a federally declared disaster or losses incurred in a trade or business. Therefore, D and E are also incorrect.

Which of the Following Statements Is Accurate