In 2020, Wally had the following insured personal casualty losses (arising from one casualty in a Federally declared disaster area). Wally also had $42,000 AGI for the year before considering the casualty.

		Fair Market Value
Asset	Adjusted Basis	Before	After	Insurance Recovery
A	$9,200	$8,000	$1,000	$2,000
B	3,000	4,000	-0-	4,000
C	3,700	1,700	-0-	900

Wally's casualty loss deduction is:

a.$500.

b.$4,700.

c.$4,800.

d.$1,600.

Jim had a car accident in 2020 in which his car was completely destroyed. At the time of the accident, the car had a fair market value of $30,000 and an adjusted basis of $40,000. Jim used the car 100% of the time for business use. He received an insurance recovery of 70% of the value of the car at the time of the accident. If Jim's AGI for the year is $60,000, determine his deductible loss on the car.

a.$19,000

b.$900

c.$2,900

d.$3,000

Mark and Lucy owned two stocks, Tinker, Inc. and Chance, Inc., that became worthless during year 8. The adjusted basis in Tinker was $80,000. Tinker was incorporated in year 2, and Mark and Lucy purchased their stock in year 4. Their adjusted basis in Chance was $20,000. Chance was incorporated in year 2, and Mark and Lucy were original stockholders. Both stocks were purchased for cash, and each corporation had total capital of $500,000. How much ordinary loss can Mark and Lucy deduct on their joint year 8 tax return as a result of these transactions?

a.$0

b.$20,000

c.$80,000

d.$100,000

Chad owned an office building that was destroyed in a tornado. The area was declared a Federal disaster area. The adjusted basis of the building at the time was $890,000. After the deductible, Chad received an insurance check for $850,000. He used the $850,000 to purchase a new building that same year. How much is Chads recognized loss, and what is his basis in the new building?

Recognized Loss

New Basis

a.

$0$850,000

b.

$0$890,000

c.

$40,000$850,000

d.

$40,000$890,000

Hunter has a loss of $50,000 from his landscaping business in the current year. He reports the loss on Schedule C of his Form 1040. After deducting the loss against his other sources of income, he has a remaining business loss of $10,000. What are Hunters options regarding the remaining $10,000 business loss?

a.He can carry the loss back 4 years and forward 20 years.

b.He can carry the loss back 2 years and forward 20 years.

c.He can choose to only carry the loss forward 20 years.

d.He can carry the loss forward indefinitely.