In 2019, Grants personal residence was completely destroyed by fire. He was insured for 100% of his
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Question:
In 2019, Grant’s personal residence was completely destroyed by fire. He was insured for 100% of his actual loss, and he received the insurance settlement. Grant had adjusted gross income before considering the casualty item of $30,000. Pertinent data with respect to the residence follows:
Adjusted basis $280,000
Value before casualty 250,000
Value after casualty –0–
1. What amount is an allowable personal deduction on Grant’s tax return if the insurance only paid $230,000?
2.What amount would be allowed as a business deduction if Grant was a sole proprietor and the building that was completely destroyed by fire was business property?
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