In 2019, Mary had the following items: $\begin{array}{lr}
\text { Salary } & \$ 30,000 \
\text { Personal use casualty gain } & 10,000 \
\text { Personal use casualty loss (after } \$ 100 \text { floor) } & 17,000 \
\text { Other itemized deductions } & 4,000
\end{array}$ Assuming that Mary files as head of household (has one dependent child), determine her taxable income for 2019.

Question

Quizplus · Accepted Answer

Mary's taxable income is calculated as follows: Start with her salary of $30,000. The personal use casualty gain of $10,000 is included in income, while the casualty loss of $17,000 is deductible. The net casualty loss is $7,000 ($17,000 loss - $10,000 gain). Other itemized deductions are $4,000. The standard deduction for head of household in 2019 is $18,350. Since the itemized deductions ($7,000 + $4,000 = $11,000) are less than the standard deduction, she uses the standard deduction. Thus, her taxable income is $30,000 - $18,350 = $11,650.

In 2019, Mary Had the Following Items Assuming That Mary Files as Head of Household (Has One