Question

Margaret incurred one personal casualty loss caused by a federally declared major disaster in 2019. The amount of the loss, after all reimbursements had been subtracted, is $2,500. Margaret's AGI is $35,000. What is the amount of her casualty loss deduction

Answer 1

Answer:

$0

Explanation:

There are two Step for the computation of casualty loss deduction if the casualty loss is personal

Step 1  Reduce $100 per casualty event from the casualty loss

Step 2 Reduce 10% of the AGI from the amount you get from step 1

Data

Loss = $2,500

AGI = $35,000

Deduction =?

Solution

Step 1 =  $2,500 - $100 = $2,400

Step 2: $2,400 - ($35,000 x 10%) = $0

If the amount in step 2 is $0 then the person is not eligible for casualty loss deduction