Mr. and Mrs. Marcum live in Southern California in an area devastated by wildfires that President Trump designated a federally declared disaster. Because of fire damage, the Marcums had to replace the roof of their home at a cost of $55,000. Their homeowners insurance reimbursed them for only $32,500 of the cost. The Marcums’ $22,500 un-reimbursed loss was their only casualty loss this year. Compute their deductible casualty loss if their AGI is:

a. $163,000.

b. $380,000.

Assume the taxable year is 2018.