Julie, Who Is Single, Has the Following Items for 2014

question 40

Essay

Julie, who is single, has the following items for 2014:
∙ Salary-$100,000.
-A hurricane completely destroyed Julie's duplex during the current year. Julie lived in one-half of the duplex and rented out the other half. Julie paid $400,000 for the duplex and has taken $80,000 of cost recovery on the rental portion of the duplex. The duplex was worth $420,000 at the time of the destruction. Julie's insurance policy paid her 90% of the fair market value of the duplex.
-Household items destroyed in the hurricane had a basis of $15,000 and a fair market value of $8,500. There was no insurance recovery on the household items.
-Julie purchased a painting three years ago for $4,000. At the time of the hurricane, the painting was worth $10,000. Julie purchased the painting as an investment with the intent that she would sell it when its value exceeded $12,000. There was no insurance recovery on the painting.
-Julie had an automobile accident in the current year. Julie used the car 100% for personal purposes. The car cost $37,000 and had a decline in FMV as a result of the accident of $5,000. The car was insured, but the policy had a $2,000 deductible clause. Julie chose not to file a claim for the damage.
-Julie owned a computer that she used 100% for business. The computer was also completely destroyed in the hurricane. It had a basis of $6,000 and a FMV of $4,000 at the time it was destroyed. Julie was not reimbursed by her employer for the loss on the computer.
-Home mortgage interest-$10,000.
Determine the amount of Julie's taxable income for 2014.

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Definitions:

Extensor Carpi Radialis Longus

A muscle in the forearm that extends and abducts the wrist, playing a key role in hand movements.

Sartorius

The longest muscle in the human body, running from the hip to the knee, involved in flexing, abducting, and rotating the hip.

Gastrocnemius

A major calf muscle that is involved in running, jumping, and other movements requiring power from the lower leg.

Vastus Lateralis

A muscle part of the quadriceps group, situated on the lateral side of the thigh.