In 2016,Rachelle's pleasure boat was destroyed by a flood.She had purchased the boat in 2013 for $45,000.On what forms)will Rachelle report this loss?
A)Form 4684,Casualties and Theft,and Schedule D,Capital Gains and Losses.
B)Form 4797,Sales of Business Property and Involuntary Conversions,and Schedule D,Capital Gains and Losses.
C)Form 4684,Casualties and Thefts,and Schedule A,Itemized Deductions.
D)On the first page of Form 1040.

Question

Quizplus · Accepted Answer

Rachelle should report the loss on Form 4684, Casualties and Thefts, and Schedule A, Itemized Deductions. This is because the loss is not related to a business or investment property and thus cannot be reported on Form 4797 or Schedule D. Instead, it is considered a personal casualty loss and can be deducted on Schedule A as an itemized deduction.

In 2016,Rachelle's Pleasure Boat Was Destroyed by a Flood