[hmesalguero]

This is the 500 floor I am confused about. Please help

Nelson Harris had adjusted gross income in 2010 of $60,000. During the year his personal summer home was completely destroyed by a hurricane. Pertinent data with respect to the home follows:

Cost basis

$39,000

Value before casualty

45,000

Value after casualty

3,000

Harris was partially insured for his loss and in 2010 he received a $15,000 insurance settlement. What is Harris’ allowable casualty loss deduction for 2010?

A. $17,500

B. $18,000

C. $26,900

D. $27,000

FAR - 76
AUD - 74,84 🙂
REG - 76
BEC - 72, 80

Roger's CPA Review

[jcw1503]

Where did this question come from and what did they say was the answer?

The answer I am getting is not one of the choices!!!

FAR - Attempt 1-(70)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
AUD- Attempt 1-Passed!!!!!!!!! )-Praise the Lord-Couldn't have done it without him.
REG-Attempt 1-(73)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
BEC-Attempt 1-(71)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.

****What is one Golden Rule for Passing the Exam? 1) Read the question properly. and 2) Leave yourself enough time to answer all of the....
****Success seems to be connected with action. Successful people keep moving. They makes mistakes, but they don't quit.
****Success is the sum of small efforts, repeated day in and day out.

[Anonymous]

Isn't the floor $100 and not $500?

[jcw1503]

Thats what I was thinking too. That is the difference in my answer a the answer provided.

FAR - Attempt 1-(70)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
AUD- Attempt 1-Passed!!!!!!!!! )-Praise the Lord-Couldn't have done it without him.
REG-Attempt 1-(73)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
BEC-Attempt 1-(71)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.

****What is one Golden Rule for Passing the Exam? 1) Read the question properly. and 2) Leave yourself enough time to answer all of the....
****Success seems to be connected with action. Successful people keep moving. They makes mistakes, but they don't quit.
****Success is the sum of small efforts, repeated day in and day out.

[jcw1503]

Thats what I was thinking too. That is the difference in my answer a the answer provided.

FAR - Attempt 1-(70)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
AUD- Attempt 1-Passed!!!!!!!!! )-Praise the Lord-Couldn't have done it without him.
REG-Attempt 1-(73)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.
BEC-Attempt 1-(71)...Attempt 2 (Passed Baby)-Praise the Lord-Couldn't have done it without him.

****What is one Golden Rule for Passing the Exam? 1) Read the question properly. and 2) Leave yourself enough time to answer all of the....
****Success seems to be connected with action. Successful people keep moving. They makes mistakes, but they don't quit.
****Success is the sum of small efforts, repeated day in and day out.

[Anonymous]

The answer looks to be C. The floor is $100 the last time i checked. $45,000-$3,000= $42,000-$15,000(amount recovered)= $27,000-$100(floor) = $$26,900

[momto5]

Well I am getting $17,900, which isn't one of the available answers.

If the adjusted basis is smaller than the decrease in FMV, you have to start with the basis, which is $39,000. After subtracting the $15,000 ins. and the $100 floor, that leaves $23,900. Then you can only deduct the amount which is more than 10% of AGI, so you have to subtract another $6,000, which leaves $17,900.

Being that one of the answers is $17,500, that would make it look like the problem estimates a $500 floor instead of a $100 floor. Could the question be old? Were the old rules a $500 floor?

FAR - 92 (4/27/12)
AUD - 96 (7/17/12)
BEC - 92 (8/30/12)
REG - 91 (11/12/12)

[momto5]

https://www.another71.com/cpa-exam-forum/topic/casualty-loss-questions

Evidently it used to be $500 and is now $100.

FAR - 92 (4/27/12)
AUD - 96 (7/17/12)
BEC - 92 (8/30/12)
REG - 91 (11/12/12)

[hmesalguero]

This is from the Wiley Test bank 2011. I am keeping up with the updates but I dont understand why it says 500.

+

FAR - 76
AUD - 74,84 🙂
REG - 76
BEC - 72, 80

Roger's CPA Review

[Anonymous]

$500 is what is used to be – it is not $100 floor

[Anonymous]

*now

[Author]

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