Olaf lives in the state of Minnesota. In May $2024,$ a tornado hit the area and damaged his home and automobile. Applicable information is as follows:

Item Adjusted

Basis FMV

before FMV

after Insurance

Proceeds

Home $$350,000$ $$500,000$ $$100,000$ $$290,000$

Auto $60,00040,00010,00020,000$

Because of the extensive damage caused by the tornado, the President designated the area a Federal disaster area.

Olaf and his wife, Anna, always file a joint return. Their $2023$ tax return shows AGI of $$180,000$ and taxable income of $$150,000.$ In $2024,$ their return shows AGI of $$300,000$ and taxable income $($exclusive of the casualty loss deduction$)$ of $$245,000.$

Assume the taxpayers are in the $22\%$ tax bracket in $2023$ and the $24\%$ tax bracket in $2024.$

Determine the amount of Olaf and Anna's loss and the year in which they should take the loss.

Item Amount of Loss

Home $fill in the blank $1$

$0$

Auto fill in the blank $2$

$30,000$

Total loss $fill in the blank $3$

$30,000$

Less: statutory floor amount fill in the blank $4$

$-100$

Loss before statutory $\%$ of AGI $fill in the blank $5$

$29,900$

Amount of loss on last year's return:

Loss $fill in the blank $6$

$30,000$

Less: statutory $\%$ of AGI fill in the blank $7$

$18,000$

Total loss $fill in the blank $8$

$12,000$

Amount of loss on current year's return:

Loss $fill in the blank $9$

$30,000$

Less: statutory $\%$ of AGI fill in the blank $10$

$30,000$

Total loss $fill in the blank $11$

$0$

Olaf and Anna should include the loss on the

$2023$

return, because the tax savings is greater.