Question
Terry has a casualty gain of $1,000 and a casualty loss of $5,500, before the $100 floor and before the adjusted gross income limitation. The
Terry has a casualty gain of $1,000 and a casualty loss of $5,500, before the $100 floor and before the adjusted gross income limitation. The gain and loss were the result of two separate casualties occurring during the current year and both properties were personal-use assets. If Terry itemizes deductions on her current year return and has adjusted gross income of $25,000, what is Terry's gain or net itemized deduction as a result of these casualties?
A. $1,900 itemized deduction
B. $2,800 itemized deduction, $1,000 capital gain
C. $5,300 itemized deduction, $1,000 capital gain
D. $1,800 itemized deduction
E. None of these choices are correct.
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