In 2017, Sarah (Who Files as Single) Had Silverware Worth

question 83

Multiple Choice

In 2017, Sarah (who files as single) had silverware worth $10,000 (basis $6,000) stolen from her home.Her insurance company told her that her policy did not cover the theft.In 2017, Sarah's other itemized deductions were $2,000, and she had AGI of $30,000.In February 2019, Sarah's insurance company decided that Sarah's policy did cover the theft of the silverware and they paid Sarah $5,000.Determine the tax treatment of the $5,000 received by Sarah during 2019.

• A)None of the $5,000 should be included in gross income.
• B)$2,900 should be included in gross income.
• C)$5,000 should be included in gross income.
• D)Last year's return should be amended to include the $5,000.
• E)None of these.

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Definitions:

Prostate-Specific Antigen

A protein produced by the prostate gland, elevated levels of which can indicate prostate cancer or other prostate-related conditions.

Benign Prostatic Hyperplasia

A condition in men where the prostate gland is enlarged, leading to discomfort and problems with urination.

Circumcision

A surgical procedure involving the removal of the foreskin from the human penis, often performed for religious or health reasons.

FTA-ABS

Fluorescent treponemal antibody absorption, a blood test used for detecting antibodies to the bacterium Treponema pallidum, the causative agent of syphilis.