Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water

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Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2017, which totally ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable.


Damaged Items


Fair Market Value Just Prior to Damage

Original Item Cost (Basis)

Antique poster bed


$6,000


$5,000


Pool table


7,000


11,000


Flat screen TV


700


2,500



Their homeowner’s insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,700.  Their AGI for 2017 was $50,000.  What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2017?

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Fundamentals Of Taxation 2018

ISBN: 9781259713736

11th Edition

Authors: Ana M. Cruz Dr., Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler

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