This year D's hunting cabin worth $5,000 (basis $8,000) was destroyed by fire.The cabin was uninsured.If D's A.G.I.is $40,000 this year, how much of the loss may be claimed as an itemized deduction?

Question

Quizplus · Accepted Answer

The deductible loss is the lesser of the decline in value ($5,000) or the adjusted basis ($8,000), minus $100, and then reduced by 10% of AGI ($4,000). So, $5,000 - $100 - $4,000 = $900.

This Year D's Hunting Cabin Worth $5,000 (Basis $8,000) Was