Question
In 2022 , John Dutton had the following insured personal casualty losses (arising from one casualty in a Federally declared disaster area). Mr. Dutton also
In 2022 , John Dutton had the following insured personal casualty losses (arising from one casualty in a Federally declared disaster area). Mr. Dutton also had $42,000 AGI for the year before considering the casualty.
Fair Market Value | | |||
Asset | Adjusted Basis | Before | After | InsuranceRecovery |
A | $9,200 | $8,000 | -0- | $6,000 |
B | 3,000 | 4,000 | -0- | 3,000 |
C | 3,700 | 1,700 | -0- | 900 |
Mr. Duttons casualty loss deduction is:
| a. | $500. | |
| b. | $1,600. | |
| c. | $1,700. | |
| d. | $4,800. |
On June 1 of the current year, Tab converted a machine from personal use to rental property. At the time of the conversion, the machine was worth $90,000. Five years ago, Tab purchased the machine for $70,000. The machine is still encumbered by a $50,000 mortgage. What is the basis of the machine for cost recovery?
| a. | $70,000 | |
| b. | $90,000 | |
| c. | $120,000 | |
| d. | $140,000 |
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Auditing A Business Risk Approach
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
8th edition
538476230, 978-0538476232
