In Year 5, an earthquake severely damaged Fred's home. The area was declared a federal disaster. Fred's home was valued at $210,000 before the earthquake but only $140,000 after the earthquake. The home's cost basis was $110,000 and it was not insured. Fred's adjusted gross income (AGI) was $90,000 in Year 5 and $180,000 in Year 4. Assume his marginal tax rate for the deduction was 22% in Year 5 and 32% in Year 4. What is the maximum tax benefit that Fred can derive from the casualty loss?

( posting to see if 13,398 is correct or not )

		$16,608
		$0
		$13,398
		$13,420
		$16,640

Mary and Joseph are married with 2 children: Jesse, age 15, and Jessica, age 18. For the current year, the couples taxable income is $300,000. What is their tax credit amount related to their children for the current year?

		$2,500
		$0
		$1,000
		$2,000
		$4,000

On July 15, Year 1, Blancas office building burned to the ground due to an electrical fire. The buildings adjusted basis at the time of the fire was $100,000 but it was insured for $550,000, which Blanca received on August 1, Year 1. On December 1, Year 3, Blanca purchased a new office building at a cost of $500,000. Under the involuntary conversion rules of Code Section 1033, what is Blancas tax basis in the new building?

( NOT SURE IF ANSWER IS 150,000??? )

		$100,000
		$150,000
		$450,000
		$500,000