A flood damaged an auto owned by Mr.and Mrs.South on June 15 of this year.The car was only used for personal purposes. Based on these facts,what is the amount of the South's casualty loss deduction after limitations for this year?

Question

A flood damaged an auto owned by Mr.and Mrs.South on June 15 of this year.The car was only used for personal purposes.  Based on these facts,what is the amount of the South's casualty loss deduction after limitations for this year?

Quizplus · Accepted Answer

The amount of casualty loss deduction is limited to the lesser of the decrease in the fair market value (FMV) of the property or the adjusted basis of the property. Since the car was used for personal purposes, the adjusted basis is the original cost of the car. Without any information about the FMV of the car before and after the flood, we cannot determine the decrease in FMV. Additionally, the deductible amount is reduced by $100 and 10% of the taxpayer's AGI. Therefore, the deductible amount would be $900, as it is the only option that falls within the range of possible deductions for this scenario.

A Flood Damaged an Auto Owned by Mr