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Trevor recently purchased a beautiful house on a hillside in sunny California at a cost of $1 million. Several days of heavy rainfall led to
Trevor recently purchased a beautiful house on a hillside in sunny California at a cost of $1 million. Several days of heavy rainfall led to heavy flooding and landslides throughout the region. A week later, the president announces that Trevor's county is a federally declared disaster area. During the storm, Trevor is surprised to see his neighbor's house disappear in a mudslide. Visibly shaken, Trevor makes immediate efforts to sell his home. Although the view from his lot has improved considerably, he meets severe buyer resistance when forced to explain why he lacks one set of neighbors. Trevor's best offer, made by a family just arrived in town, is $500,000. Trevor reevaluates his life insurance portfolio, places his personal affairs in order, and decides not to sell. Presuming the landslide caused no physical damage to his property, does Trevor have a casualty loss? a. List as many possible tax research issues as you can to determine Trevor's potential casualty-loss deduction from the decrease in value of his house. b. After completing your list of tax research issues, list the keywords you might use to construct an online tax research query. c. Execute an online search using your query. For simplicity, select the IRS Publications database from whichever online tax service you use. Summarize your findings
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