During the current year, Rulons toilet overflowed because of a mechanical problem. Rulon was outside playing croquet,
Question:
During the current year, Rulon’s toilet overflowed because of a mechanical problem. Rulon was outside playing croquet, and by the time he returned, the water had flooded the basement, causing damage to the carpet, walls, and ceiling. The cost of repairing the damage was $9,000. Rulon has homeowners insurance that will cover half of the damage. However, because he has already had claims this year, Rulon does not want to report the incident to his insurance company for fear of a large increase in insurance rates. Instead, Rulon wants to deduct the loss as a casualty loss on his tax return. His AGI for this year is $50,000, and he has other itemized deductions of $6,000. Rulon is single. What amount of the casualty loss may he deduct?
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Under Sec 165h5E no casualty loss deduction may be taken on personaluse property to the extent it ...View the full answer
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