Ordinary loss long term capital gain 8000 less no

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Ordinary lossLong-term capital gain$8,000Less: no capital loss$Equals: net long-term capital gain$8000Taxable net long-term capital gainAdjusted gross incomeNext year's AGISalaryOrdinary lossLong-term capital gain$10,000Less: no capital loss$Taxable net long-term capital gainAdjusted gross incomeTotal AGICurrent yearNext yearTotal2Which option will result in the best overall tax consequence for Mary?00
Problem 7-37 (LO. 3, 4, 8)Olaf lives in the state of Minnesota. A tornado hit the area and damaged his home and automobile. Applicable information is as follows:ItemAdjusted BasisFMV beforeFMV afterInsurance ProceedsHome$350,000 $500,000 $100,000 $280,000 Auto60,000 40,000 10,000 20,000 Because of the extensive damage caused by the tornado, the President designated the area a disaster area.Olaf and his wife, Anna, always file a joint return. Their 2015 tax return shows AGI of $180,000 and taxable income of $140,000. In 2016, their return shows AGI of $300,000 and taxable income (exclusive of the casualty loss deduction) of $215,000.Determine the amount of Olaf and Anna's loss and the year in which they should take the loss.Click here to access the 2016 tax rate schedule.Home$Auto
Total loss$Less: statutory floor amountLoss before statutory % of AGI$Amount of loss on last year’s return:Loss$Less: statutory % of AGITotal loss$Amount of loss on current year's return:Loss$Less: statutory % of AGITotal loss$Olaf and Anna should include the loss on the 2015 return, because the tax savings is greater.FeedbackGenerally, a casualty loss is deducted in the year the loss occurs. However, no casualty loss is permitted if a reimbursement claim with a reasonable prospect of full recovery exists.Answers: $70,000; $10,000; $80,000; $100; $79,900; $79,900; $18,000; $61,900; $79,900; $30,000; $49,900; 2015.The rules for determining the amount of a loss depend in part on whether business use, income-producing use, or personal use property was involved. Another factor that must be considered is whether the property was partially or completely destroyed. If business property or property held for the production of income (e.g., rental property) is completely destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.The amount of the loss for personal use property must be further reduced by a $100 per event floor and a 10 percent-of-AGI aggregate floor. The $100 floor applies separately to each casualty and appliesto the entire loss from each casualty (e.g., if a storm damages both a taxpayer’s residence and automobile, only $100 is subtracted from the total amount of the loss). The losses are then added together, and the total is reduced by 10 percent of the taxpayer’s AGI. The resulting loss is the taxpayer’s itemized deduction for casualty and theft losses.An exception to the general rule for the time of deduction is allowed for disaster area losses, which arecasualties sustained in an area designated as a disaster area by the President of the United States. In such cases, the taxpayer may elect to treat the loss as having occurred in the taxable year

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