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:

Good Life

A concept reflecting a state of well-being, fulfillment, and happiness, often pursued through ethical and meaningful living.

Utility Principle

A principle in ethics and economics stating that the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number.

Carol Gilligan

An American feminist, ethicist, and psychologist best known for her work on ethical community and the ethics of care, challenging traditional models of moral development.

Moral Development

The process through which individuals evolve in their understanding and application of moral concepts, behaviors, and reasoning over time.