Olaf lives in the state of Minnesota. In 2019, a tornado hit the area and damaged his home and automobile. Applicable information is as follows:

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 2018 tax return shows  AGI of $180,000 and taxable income of $140,000. In 2019, their return shows AGI of  $300,000 and taxable income (exclusive of the casualty loss deduction) of $220,000.  Determine the amount of Olaf and Anna’s loss and the year in which they should  take the loss.

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Adjusted Basis Insurance Item FMV before FMV after Proceeds Home $350,000 $500,000 $100,000 $280,000 Auto 60,000 40,000 10,000 20,000