Tax Drill - Casualty Loss Deduction

Belinda was involved in a boating accident in 2019. Her speedboat, which was used only for personal use and had a fair market value of $28,000 and an adjusted basis of $14,000, was completely destroyed. She received $10,000 from her insurance company. Her AGI for 2019 is $37,000.

Belinda's tentative casualty loss before any limitations (i.e. $100 floor and AGI) is $.

Is her loss currently deductible? Only to the extend the loss can offset other personal casualty gains.

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The rules for determining the amount of a loss depend in part on whether business use, income-producing use, or personal use property was involved. Another factor that must be considered is whether the property was partially or completely destroyed.