In 2019, Morley, a single taxpayer, had an AGI of $30,000 before considering the following items: $\begin{array}{lc}
\text { Loss from damage to rental property } & (\$ 6,000) \
\text { Loss from theft of bonds } & (3,000) \
\text { Personal casualty gain } & 4,000 \
\text { Personal casualty loss (after } \$ 100 \text { floor) } & (9,000)
\end{array}$ The personal casualties occurred in a Federally declared disaster area. Determine the amount of Morley's itemized deduction from the losses.

Question

Quizplus · Accepted Answer

The correct answer is D. The personal casualty loss deduction is limited to the amount of the loss that exceeds 10% of the taxpayer's AGI. In this case, Morley's AGI is $30,000, so the 10% floor is $3,000. The personal casualty loss that exceeds the floor is $9,000 - $3,000 = $6,000. The other losses are not deductible because they are not casualty losses. Therefore, Morley's itemized deduction from the losses is $6,000.

In 2019, Morley, a Single Taxpayer, Had an AGI of $30,000