Juanita,who Is Single,is in an Automobile Accident in 2015 and Her

question 53

Multiple Choice

Juanita,who is single,is in an automobile accident in 2015 and her car sustains $6,200 in damages.Because both drivers received tickets in the accident,Juanita does not expect to recover any of the loss from her insurance company.Juanita's 2015 AGI is $31,000,and she deducts a $3,000 loss on her 2015 tax return.Her other itemized deductions in 2015 exceed $12,000.In 2016,Juanita's insurance company reimburses her $2,800.Juanita's 2016 AGI is $28,000.As a result,Juanita must

• A)amend 2015 to show a $200 loss.
• B)do nothing and simply keep the $2,800.
• C)do nothing to the 2015 return but report $2,800 of income on her 2016 return.
• D)amend the 2015 return to show $0 loss and file her 2016 return to show a $200 loss.

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Definitions:

Turnaround

The process of implementing significant changes in a company to reverse poor performance and return to profitability.

Liquidation

The termination of a business and the sale of its assets.

Value Statement

A declaration that communicates an organization's core principles and ethical commitments to its stakeholders.

Honesty

The quality of being truthful, transparent, and free from deceit or fraud.