Norm's car,which he uses 100% for personal purposes,was completely destroyed in an accident in 2010.The car's adjusted basis at the time of the accident was $13,000.Its fair market value was $11,500.The car was covered by a $2,000 deductible insurance policy.Norm did not file a claim against the insurance policy because of a fear that reporting the accident would result in a substantial increase in his insurance rates.His adjusted gross income was $14,000 (before considering the loss).What is Norm's deductible loss?

Question

Quizplus · Accepted Answer

Norm's deductible loss is $0 because he did not file a claim with his insurance, and personal-use property losses are only deductible if they are not covered by insurance or if a claim is filed and denied.

Norm's Car,which He Uses 100% for Personal Purposes,was Completely Destroyed