Juanita,who Is Single,is in an Automobile Accident in 2014 and Her

question 95

Multiple Choice

Juanita,who is single,is in an automobile accident in 2014 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 2014 AGI is $31,000,and she deducts a $3,000 loss on her 2014 tax return.Her other itemized deductions in 2014 exceed $12,000.In 2015,Juanita's insurance company reimburses her $2,800.Juanita's 2015 AGI is $28,000.As a result,Juanita must

• A)amend 2014 to show a $200 loss.
• B)do nothing and simply keep the $2,800.
• C)do nothing to the 2014 return but report $2,800 of income on her 2015 return.
• D)amend the 2014 return to show $0 loss and file her 2015 return to show a $200 loss.

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Definitions:

Unit Costs

Unit Costs refer to the total expenditure incurred to produce, store, and sell one unit of a product, including all variable and fixed costs.

Variable

An element, feature, or factor that is liable to vary or change; in science and mathematics, a quantity that can assume any of a set of values.

Fixed Costs

Charges that are unaffected by changes in production or sales volumes, like lease payments, employee salaries, and insurance costs.

Fixed Costs

Financial obligations that do not fluctuate with changes in production levels or sales numbers, like rent, salary payments, and insurance premiums.