During the year,Shipra's apartment is burglarized and her TV and stereo are taken.Her basis in the TV is $1,200 and it has a fair market value of $700.Her basis in the stereo is $400 and it has a fair market value of $600.What is Shipra's theft loss deduction (before considering the annual limitation based upon AGI)?

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Quizplus · Accepted Answer

Shipra's theft loss deduction would be the lesser of the adjusted basis ($1,600) or the decline in fair market value ($300 for the TV and $200 for the stereo), which is a total of $500. Therefore, her theft loss deduction is $500.

During the Year,Shipra's Apartment Is Burglarized and Her TV and Stereo