On November 1 of the current year, Sam Smith dropped off to sleep while driving home from
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Sam is an employee of Snipe Industries. The corporation purchased the car new two years ago for $40,000. The automobile had a fair market value of $30,000 before the accident and $12,000 after the accident. The car was covered by an insurance policy that had a $3,000 deductible clause. The corporation is afraid that the policy will be canceled if it makes a claim for the damages. Therefore, Snipe is considering not filing a claim. The company believes that the casualty loss deduction will help mitigate the loss of the insurance reimbursement. The corporation's taxable income for the current year is $25,000.
Write a letter to Snipe Industries that contains your advice regarding the filing of an insurance claim for reimbursement for the damages to the company's car. Snipe Indus tries' address is 450 Colonel's Way, Warrensburg, MO 64093.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
South Western Federal Taxation 2015 Essentials Of Taxation Individuals And Business Entities
ISBN: 9781285438290
18th Edition
Authors: James Smith, William Raabe, David Maloney, James Young
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