Constance, Who Is Single, Lives in an Area That Suffered

question 926

Multiple Choice

Constance, who is single, lives in an area that suffered a major hurricane which was declared a federal disaster. Her car sustained $6,200 in damages. Constance does not expect to recover any of the loss from her insurance company. Constance's 2018 AGI is $31,000. Her casualty loss is $3,000; she has other itemized deductions of $5,200. In 2019, Constance's insurance company reimburses her $2,800. Constance's 2019 AGI is $28,000. As a result, Constance must

• A) do nothing and simply keep the $2,800.
• B) do nothing to the 2018 return but report $2,800 of income on her 2019 return.
• C) amend the 2018 return to show $0 loss and file her 2019 return to show $200 loss.
• D) amend the 2018 return to show the $200 loss.

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Definitions:

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