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:

Intercostal Nerves

The intercostal nerves are part of the somatic nervous system and run between the ribs to innervate the chest and abdominal walls.

Thoracic Spinal Nerves

Nerves that emerge from the spinal cord in the thoracic (middle) area of the spine, involved in numerous body functions including respiration.

Spinal Nerve Routes

The paths taken by spinal nerves as they exit the spinal cord and branch out to various parts of the body.

Brain Damage

Physical injury to the brain tissue that can result in impaired function, such as loss of memory, motor control, or cognitive abilities.