Johnny's personal-use classic Ford Mustang, for which he paid $12,000 seven years ago but now worth $20,000, was completely destroyed in a hurricane, which was declared a federal disaster. Johnny does not carry auto insurance. As a result of the hurricane, Johnny missed a business meeting and lost out on an order from which he would have earned $3,000. In that same hurricane, Johnny lost his stereo equipment worth $1,600 (purchase price $2,500), along with jewelry valued at $4,000 (purchase price $3,000). Johnny's homeowner's policy covered $5,000 of this loss. His adjusted gross income for the year is $80,000. Assuming he can itemize his deductions, calculate his deductible casualty and theft loss.
Johnny's personal-use classic Ford Mustang, for which he paid $12,000 seven years ago but now worth $20,000, was completely destroyed in a hurricane, which was declared a federal disaster. Johnny does not carry auto insurance. As a result of the hurricane, Johnny missed a business meeting and lost out on an order from which he would have earned $3,000. In that same hurricane, Johnny lost his stereo equipment worth $1,600 (purchase price $2,500), along with jewelry valued at $4,000 (purchase price $3,000). Johnny's homeowner's policy covered $5,000 of this loss. His adjusted gross income for the year is $80,000. Assuming he can itemize his deductions, calculate his deductible casualty and theft loss.
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 66P
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Transcribed Image Text:Johnny's personal-use classic Ford Mustang, for which he paid $12,000 seven years ago but now worth $20,000, was completely destroyed in a
hurricane, which was declared a federal disaster. Johnny does not carry auto insurance. As a result of the hurricane, Johnny missed a business
meeting and lost out on an order from which he would have earned $3,000. In that same hurricane, Johnny lost his stereo equipment worth
$1,600 (purchase price $2,500), along with jewelry valued at $4,000 (purchase price $3,000). Johnny's homeowner's policy covered $5,000 of
this loss. His adjusted gross income for the year is $80,000.
Assuming he can itemize his deductions, calculate his deductible casualty and theft loss.
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