1-

Noelle's diamond ring was stolen in 2017. She originally paid $18,100 for the ring, but it was worth considerably more at the time of the theft. Noelle filed an insurance claim for the stolen ring, but the claim was denied. Because the insurance claim was denied, Noelle took a casualty loss for the stolen ring on her 2017 tax return. In 2017, Noelle had AGI of $90,500. After Noelle threatened legal action, in early 2019, the insurance company had a "change of heart" and sent Noelle a check for $10,860 for the stolen ring. The per-event floor is $100.

What is the proper tax treatment of the $10,860 Noelle received from the insurance company in 2019? Noelle should the amount of $ .

2-

Abby, a single taxpayer, purchased 10,000 shares of 1244 stock several years ago at a cost of $20 per share. In November of the current year, Abby received an offer to sell the stock for $12 per share. She has the option of either selling all of the stock now or selling half of the stock now and half of the stock in January of next year. Abby will receive a salary of $80,000 for the current year and $90,000 next year. Abby will have long-term capital gains of $8,000 for the current year and $10,000 next year.

If Abby's goal is to minimize her AGI for the two years, determine whether she should sell all of her stock this year or half of her stock this year and half next year.

a. Determine Abby's total AGI under both options for the current year and next year.

If an amount is zero, enter "0".

Sell all of the stock this year:
Current year's AGI
Salary		$80,000
		$
Long-term capital gain	$8,000
Less:	$
Equals:	$
		$
Adjusted gross income		$
	$
Next year's AGI
Salary		$90,000
Long-term capital gain	$10,000
Less:	$
Equals:	$
		$
Adjusted gross income		$
Total AGI
Current year		$
Next year
Total		$
Sell half of the stock this year and half next year:
Current year's AGI
Salary		$80,000
		$
Long-term capital gain	$8,000
Less:	$
Equals:	$
		$
Adjusted gross income		$
Next year's AGI
Salary		$90,000
		$
Long-term capital gain	$10,000
Less:	$
		$
Adjusted gross income		$
Total AGI
Current year		$
Next year
Total		$

b. Which option will result in the best overall tax consequence for Abby?