Juanita,who Is Single,lives in an Area That Suffered a Major

question 23

Multiple Choice

Juanita,who is single,lives in an area that suffered a major hurricane in 2019 which was declared a federal disaster.Her car sustained $6,200 in damages.Juanita does not expect to recover any of the loss from her insurance company.Juanita's 2019 AGI is $31,000,and she deducts a $3,000 loss after applying limitations on her 2019 tax return.Her other itemized deductions in 2019 exceed $12,200.In 2020,Juanita's insurance company reimburses her $2,800.Juanita's 2020 AGI is $28,000.As a result,Juanita must

• A)amend 2019 to show a $200 loss.
• B)do nothing and simply keep the $2,800.
• C)do nothing to the 2019 return but report $2,800 of income on her 2020 return.
• D)amend the 2019 return to show $0 loss and file her 2020 return to show a $200 loss.

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Definitions:

Bond Payable

A recorded obligation indicating a company must repay a borrowed sum at a set interest rate by a specified date.

Accounts Payable

Liabilities or amounts owed by a business to its creditors for goods and services that have been received but not yet paid for.

Accounts Receivable

Financial obligations of customers to a firm for items or services rendered but not yet compensated.

Face Value

Refers to the nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.