3. Calculate the amount of the casualty loss deduction, if any, that would claimed given that a business warehouse was completely destroyed by fire:

FMV of the warehouse before the fire $600,000

FMV of the warehouse after the fire $0

Basis of the warehouse $500,000

Insurance recovery $400,000

4. Assume the same facts as in (3) above except that the warehouse was not completely destroyed and the FMV of the warehouse after the fire was

$450,000 and the insurance recovery was $100,000. Now what would be the amount of the casualty loss deduction?

5. Assume the same facts as in (4) above except the destroyed property was a personal residence and that the fire was declared a Presidential disaster. Now calculate the amount of the deductible loss assuming the taxpayer's AGI was $200,000.

6. Briefly recap the current rules applicable to net operating losses. How much of the NOL is currently deductible and what happens to unused losses.

7. Indicate which of the following losses or expenses would be included in calculating a net operating loss by placing a check mark on the appropriate line.

A. A short-term capital loss that resulted from selling stock___

B. Net business loss from a sole proprietorship ____

C. A casualty loss involving a personal residence that resulted from a

Presidentially declared disaster____

D. Loss from selling 1244 stock ____

E. Deductible contributions made to a traditional IRA account ____

F. Loss in selling business equipment ____

G. Charitable donations claimed as itemized deductions____