This Summer,Rick's Home (Which Has a Basis of $80,000)is Damaged

question 22

Multiple Choice

This summer,Rick's home (which has a basis of $80,000) is damaged by a tornado.An appraisal by a realtor placed the FMV of the home at $120,000 before the tornado and at $85,000 after the tornado.Rick estimates that the insurance company will reimburse him for 60% of the loss.Next year,the insurance company pays Rick $20,000.Rick's current year's AGI is $50,000 and his next year's AGI is $55,000.Rick suffers no other casualty losses in either year.After limitations,Rick may deduct a casualty loss this year of

• A)$ 8,900.
• B)$ 9,900.
• C)$15,000.
• D)$35,000.

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Definitions:

Conscious Thought Patterns

The deliberate and aware sequence of thoughts or mental images that one can recognize and potentially control.

Superego

A part of the human psyche in Freudian psychoanalysis which acts as the moral center, overseeing the actions and thoughts dictated by the ego and id.

High Standards

High standards refer to the practice of setting lofty goals or criteria for oneself or others, often manifesting in expectations of excellence and superior performance.

Freud

Renowned early 20th-century psychologist known for developing psychoanalytic theory which emphasizes unconscious motivations and childhood experiences.