In February 2015,Amelia's Home,which Originally Cost $150,000,is Damaged by a Windstorm.Amelia

question 42

Multiple Choice

In February 2015,Amelia's home,which originally cost $150,000,is damaged by a windstorm.Amelia had refinanced the home shortly before the storm,and it was appraised at $200,000.After the storm,the home appraised at $120,000.Amelia has received no insurance reimbursement by December 31,but expects to recover 90 percent of the loss.In the subsequent year,the insurance company pays Amelia $50,000.Amelia's AGI is $85,000 in 2015,and her 2016 AGI is $80,000.Amelia suffers no other casualty losses in either year.Amelia may deduct

• A)$7,900 in 2015.
• B)$22,000 in 2016.
• C)$13,900 in 2016.
• D)$14,000 in 2016.

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Definitions:

Thrust Fault

A type of fault where the hanging wall moves up relative to the footwall, often associated with the compression of Earth's crust.

Normal Fault

A type of geological fault where the hanging wall has moved downward relative to the footwall, usually due to extensional forces.

Cleavage

In geology, the tendency of a mineral to break along flat, parallel surfaces determined by its crystal structure.

Hornfels

A hard, fine-grained metamorphic rock formed by the contact metamorphism of clay-rich or silicate rocks.