[mgoloubenko]

Hello Friends!

So I’m supplementing Becker with other software like Wiley and CPAReviewforfree.com for the SIMs, just so I can get some practice with a variety of possible topics. According to Becker, when you have a personal casualty loss you first choose the lesser of the decline in FMV of the property or the adjusted basis of the property as your starting point. Then you subtract $100, and finally deduct the 10% of AGI and anything that is the excess over that amount can be deducted as a personal casualty loss. Now I’ve tried a similar Simulation using the CPAReviewforFree.com SIMs and it says that $500 is automatically deducted, instead of $100. Can anyone clarify this for me- do I use $100 or $500, is this simply an error?

FAR 4/9/12- PASSED
BEC 7/13/12- PASSED
AUD 8/16/12- Ughhh 71, Rematch: 90!!!
REG-12/6/12 PASSED

USC MAcc- Fight on!

They say good things come to those who wait, but only those things that are left by those who hustle.

[jenuno01]

Hi! Becker is the sh*#t. So, they're always right. Ok, not always, but in this case they are. I wouldn't place all my reliance on CPAExamforfree, they have helpful stuff… but you should trust and stick to Becker. Good luck!

Class of 2012

[Anonymous]

I am not sure if my post will ever show up because I am stuck in spam but I ran into this in Wiley right after I read your post. Roger said the same rule in Becker. (Basis – $100 per event – 10% AGI)

Here is the MCQ that I ran into that has conflicting info:

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

Explanation: Answer A is correct. The deduction for a nonbusiness casualty loss is computed as the lesser of (1) the adjusted basis of property, or (2) the decline in FMV; reduced by any insurance recovery, a $500 floor, and 10% of the taxpayer's AGI.

Lesser of:

1) Adjusted basis

$39,000 or

2) Decline in FMV ($45,000 – $3,000) =

$42,000

$39,000

Decreased by:

Insurance recovery

(15,000)

$500 floor

(500)

10% of $60,000

(6,000)

Casualty loss deduction

$17,500

[StudyHarder]

The casualty floor was $100 the last time I remembered. Don't forget to take the insurance reimbursements out of there if that information is given also.

REG - 11/12 - 87
BEC - 12/12 - 84
AUD - 5/13 - 97
FAR - 8/13 - 84

Ethics - DONE

Class of 2012 - 2013

Sending in License as we speak!

[WantToBeDone]

I noticed this as well, and I believe the casualty deduction was $500 in prior years and it is now $100. So use $100 on the test. Becker states this in one of their multiple choice responses.

BEC - 80
AUD - 85
FAR - 76
REG - 75

[Anonymous]

The $500 deduction applies to casualty losses incurred between Jan. 1, 2008 and Dec. 31, 2009. After that, the law reverts back to the previous $100. Cpa review for free just hasn't updated their problems.

[Author]

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