Julie, Who Is Single, Has the Following Items for 2018

question 11

Essay

Julie, who is single, has the following items for 2018:
? Salary-$100,000.
? A hurricane completely destroyed Julie's duplex during the current year. Julie lived in one-half of the duplex and rented out the other half. Julie paid $400,000 for the duplex and has taken $80,000 of cost recovery on the rental portion of the duplex. The duplex was worth $420,000 at the time of the destruction. Julie's insurance policy paid her 90% of the fair market value of the duplex. After the storm, her county was declared a Federal disaster area.
? Household items destroyed in the hurricane had a basis of $15,000 and a fair market value of $8,500. There was no insurance recovery on the household items.
Julie purchased a painting three years ago for $4,000. At the time of the hurricane, the painting was worth $10,000. Julie purchased the painting as an investment with the intent that she would sell it when its value exceeded $12,000. There was no insurance recovery on the painting.
? Julie had an automobile accident in the current year. Julie used the car 100% for personal purposes. The car cost $37,000 and had a decline in FMV as a result of the accident of $5,000. The car was insured, but the policy had a $2,000 deductible clause. Julie chose not to file a claim for the damage.
? Julie owned a computer that she used 100% for business. The computer was also completely destroyed in the hurricane. It had a basis of $6,000 and a FMV of $4,000 at the time it was destroyed. Julie was not reimbursed by her employer for the loss on the computer.
? Home mortgage interest-$10,000.
Determine the amount of Julie's taxable income for 2018.

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Definitions:

Capital Flight

Capital flight refers to the sudden and large-scale outflow of financial assets and capital from a country due to economic or political instability.

Supply Of Dollars

The total amount of US dollars available in the economy, including physical currency and bank balances.

Foreign-Currency Exchange

The process of exchanging one currency for another, determining how much of one currency you can get for another.

Net Capital Outflow

The difference between the domestic country's total investment abroad and foreign investments within the domestic country.