[Anonymous]

Question from Wiley: Frank Lyon was held up and robbed of $800 cash in June 2011. One month later, Frank had $2,000 cash stolen from him by his housekeeper. Frank’s adjusted gross income for 2010 was $10,000. How much was deductible by Frank for theft losses in 2011?

Wiley is testing $500 limit rule, and thus answer is $800.

Based on 2011 rule, the answer should be $1700, correct? (800+2000) = 2800 – 100 = 2700 – 1000 (10% of 10000) = 1700.

Sorry for flooding the forum, but just want to make sure I’m getting these right based on current rules!!

[mmen]

Based on the IRS website the “For property held by you for personal use, once you have subtracted any salvage value and any insurance or other reimbursement, you must subtract $100 from each casualty or theft event that occurred during the year. Then add up all those amounts and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year”.

June 2011: 800-100 =700

July 2011: 2000-100 =1900

Total=2600

2011 AGI: 10% of 10000=1000

Total Casualty loss: 2600-1000=1600

Let me know of any Corrections!!!! taking Reg on 2/27/11

FAR: 5/31/11 Passed
AUD: 10/08/11 Passed
BEC: 01/07/12 Passed
REG: 11/27/11,2/27/12 5/12 passed
Got my license on 10/17/12........

[jokami]

Does the questions states if an insurance claim was filed?

Casualty loss for non-business property cannot be deducted unless; an insurance was claimed or the losses are NOT covered by insurance.

I don't know anything about the $500 limit rule.

I do remember that casualty and theft losses of nonbusiness property are deductible to the extent that each individual loss exceeds $100 and that the aggregate of these excess losses exceeds 10% of AGI.

So if that is the case:

June 2011

$800 – 100 = 700

July 2011

$2000 – 100 = 1900

The aggregate:

700 + 1900 = 2600 – 1000 = $1600

B - 62, 70, 72, 79!!!
A - 68, 81
R - 70, 82
F - 84

"The limit to your abilities is where you place them" - Fortune Cookies

[MyLifeisCPA]

I came up with the answer that mmen has. $1,600. You have to subtract $100 per incident then subject to 10% of AGI.

BEC-Passed
AUD-Passed
REG-Passed
FAR-Passed (I AM DONE!!! THANK U LORD!!!!)
Licensed Texas CPA - 10/2012

[Anonymous]

Yes, the floor is $100 and you also subtract 10% of AGI. Reduce any insurance proceeds as well if any money was received from the insurance company. The $500 rule is no longer used.

[Anonymous]

Really? It's $100 per casualty…are you sure? Thank you for pointing it out…taking it in over a week, ugh.

[jeff]

He's right – the $500 was a one-time deal I believe.

Sounds like you could use the REG NINJA 😉

[Anonymous]

I already have it:) & I understand it's $100 plus 10% allowance…but I didn't now it was PER casualty. For example, regarding this questions..I added both losses and THEN took $100 off instead of doing it separately…I guess I'm wrong in doing that:(

[jeff]

Yep…per incident

[jamesblunt69]

RIP my post.

[Author]

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