William had a bad year.First,his house was burglarized.Then,the brick wall in his yard was damaged by a hit and run driver.The total amount which was stolen was $12,500.The insurance reimbursement was $8,500.The repair of the wall cost $3,000.The insurance reimbursement was $1,000.William's adjusted gross income for the year was $21,000.How much may William claim on his Schedule A as a casualty and theft loss?

Question

Quizplus · Accepted Answer

The total amount of the loss is $12,500 + $3,000 = $15,500. The total amount of the reimbursement is $8,500 + $1,000 = $9,500. The amount of the loss that William may claim on his Schedule A is $15,500 - $9,500 = $6,000. However, the amount of the loss that William may claim is limited to 10% of his adjusted gross income, which is $2,100. Therefore, William may claim $2,100 on his Schedule A as a casualty and theft loss.

William Had a Bad Year