Question
At a cost of $10,000, Sleepy purchased a car three years ago for personal use. In the current year, she dozed off one night while
At a cost of $10,000, Sleepy purchased a car three years ago for personal use. In the current year, she dozed off one night while driving and the car attached itself to a tree. Before the accident, the car was worth $8,000 but, after the accident, only $1,000. At the time of the accident Sleepy was taking a vase, a decorative ornament in her home, to a dealer to have it appraised. It had been purchased two years earlier for $10,000, and it was totally destroyed in the accident. Sleep recovered $1,000 in insurance for the car and $20,000 for the vase. Disregarding the above transactions Sleepy has an adjusted gross income of $30,000.
What is the amount of Sleepys personal casualty loss on the car for the year?
What is the amount of Sleepys personal casualty gain on the vase for the year?
What is the character of those gains and losses?
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