Franca has AGI of $130,000 this year. After applying the $100 floor, she has $26,000 of federal disaster losses on personal assets, $12,000 of nonfederal casualty losses on personal assets, and $23,000 of personal casualty gains for the year. What is Franca's deductible casualty loss?

Question

Quizplus · Accepted Answer

Franca's deductible casualty loss is calculated by first netting the federal disaster losses and nonfederal casualty losses against the personal casualty gains. The net loss is $15,000 ($26,000 + $12,000 - $23,000). After applying the $100 floor, the loss is $14,900. However, only federal disaster losses are deductible, and they must exceed 10% of AGI. 10% of $130,000 is $13,000, so the deductible loss is $14,900 - $13,000 = $1,900, rounded to $2,000.

Franca Has AGI of $130,000 This Year