Dawn started her own rock band on January 2, 2016. She acquired all her equipment on January

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Dawn started her own rock band on January 2, 2016. She acquired all her equipment on January 2, 2016, and did not dispose of any of it before 2018. On April 15, 2018, the band’s amplifier, speakers, and other electronic equipment, are stolen after a concert. The stolen equipment’s basis is $15,000, and its fair market value before the theft is $23,000. The insurance company reimburses Dawn $23,000. Her road bus runs off the highway on September 13, 2018. The basis of the bus is $60,000. Its fair market value before the accident is $80,000, and the fair market value after the accident is $70,000. The insurance company reimburses Dawn $4,000 for the bus accident. Dawn’s other gains and losses during 2018 are:

What is the effect of these transactions on Dawn’s 2018 taxable income? Explain and show your calculations.

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Concepts In Federal Taxation

ISBN: 9781337702621

26th Edition

Authors: Kevin E. Murphy, Mark Higgins

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