Tim suffered greatly this year. In January a freak storm damaged his sailboat and in July Tim's motorcycle was stolen from his vacation home. Tim originally paid $27,000 for the boat, but he was able to repair the damage for $6,200. Tim paid $15,500 for the motorcycle, but it was worth $17,000 before it was stolen. Insurance reimbursed $1,000 for the boat repairs and the cycle was uninsured.
a. Calculate Tim's deductible casualty loss if his AGI is $50,000.
b. Calculate Tim's deductible casualty loss if his AGI is $150,000.
c. How would you answer a. if Tim received an additional $65,000 in interest from municipal bonds this year?