In 2019, Larry's car, which he purchased six years ago for $6,000, was demolished in a traffic accident.As a result of the delay caused by this accident, Larry missed a business meeting and lost out on an important sale on which he could have earned a $1,200 commission.When he arrived home, he found his house had been broken into and his personal video equipment currently worth $3,200 (original cost = $5,000) had been stolen, along with his baseball card collection valued at $2,000 (basis = $1,500).Larry's homeowner's policy covered only $3,000 of this theft loss.He had dropped the collision coverage on his auto insurance policy because that portion was too expensive, so he had no insurance coverage for his auto accident.His adjusted gross income is $82,000 and the fair market value of the car at the time of the accident was $8,000.How much can Larry deduct as an itemized deduction for his casualty and theft losses in 2019?

Question

Quizplus · Accepted Answer

Casualty and theft losses related to personal property are only deductible to the extent they are attributable to a federally declared disaster, which does not seem to be the case here. Additionally, the loss of income (the $1,200 commission) is not deductible as a casualty or theft loss. Therefore, Larry cannot deduct any of these losses as an itemized deduction.

In 2019, Larry's Car, Which He Purchased Six Years Ago