In 2014, Mr. P bought a residential lot for $8,000 and built a house on it at a cost of $52,000. He added an in-ground swimming pool costing $15,000 in 2016. The house was destroyed by fire in 2022 in a federally declared disaster, and he received a $45,000 insurance settlement. The fair market value of the property was determined to be $115,000 immediately before the fire and $25,000 immediately after. Mr. P's adjusted gross income for 2022 was $65,000. What is the amount of his nonbusiness casualty loss deduction?

Answer rating: 100% (QA)

To calculate Mr Ps nonbusiness casualty loss deduction we need to determine the decrease in fair mar... View the full answer