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Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and
Derrick owns a farm in eastern North Carolina. A hurricane hit the area (a national disaster area was declared) and destroyed a farm building and some farm equipment and damaged a barn. Item Building Equipment Barn Adjusted Basis $120,300 88,208 117,90 FMV before Damage $179,488 59,388 191, 109 FMV after Insurance Damage Proceeds $ $61,200 19,988 117,90 52,800 Due to the extensive damage throughout the area, the president of the United States declared all areas affected by the hurricane as a disaster area. Derrick, who files a joint return with his wife, had $63,000 of taxable income last year. Their taxable income for the current year is $204,000, excluding the loss from the hurricane. a-1. Calculate the amount of the loss deductible by Derrick and his wife. a-2. What amount of loss should be adjusted against current and last year? Loss Amount Last year Current year
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