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Ask Lane Your Own Question
Category: Business and Finance Homework
Satisfied Customers: 12457
Experience:  Juris Doctorate, CFP Designation Master's Degree, Finance & 30 years experience providing business advice
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Hi, I have another questions for you. I think my answer

Customer Question


I have another questions for you. I think my answer is correct, but I want to increase my chances of passing the test. By the way, I have been locked out of my test and I cannot take it until the lock is released. This is crazy, isn't it?

Anyway, here it is:

Riley's home is destroyed by fire. His adjusted basis was $120,00. The FMV before the fire was $200,000 and the FMV after the fire was $0. What is the amount of casualty loss?
Submitted: 3 years ago.
Category: Business and Finance Homework
Expert:  Lane replied 3 years ago.

Lane :

Generally, you may deduct losses to your home, household goods, and motor vehicles on your federal income tax return. However, you may not deduct a casualty or theft loss that is covered by insurance unless you filed a timely insurance claim for reimbursement. Any reimbursement you receive will reduce the loss. If you did not file an insurance claim, you may deduct only the part of the loss that was not covered by insurance.

Amount of loss. You figure the amount of your loss using the following steps.

  1. Determine your cost or other basis in the property before the casualty or theft.

  2. Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. (The decrease in FMV is the difference between the property's value immediately before and immediately after the casualty or theft.)

  3. From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive.

Lane and other Business and Finance Homework Specialists are ready to help you
Expert:  Lane replied 3 years ago.

Thanks Diana,

Was waiting to see you come into the chat, but what I gave you DOES get you there.

Thanks for the rating.

Customer: replied 3 years ago.
I would join the chat if I knew how to do so. Anyway, I already knew the answer, but I wanted to confirm. Thanks again.
Expert:  Lane replied 3 years ago.

You're welcome.

I get a lot of that .. have asked the moderators.

Either way, I'll always be here this way too.