Jarrett owns a mountain chalet that he purchased in 1999 for $175,000. This year, the home appraised at $300,000. Shortly after the appraisal, a blizzard hit the area in spring of the current year, destroying trees and severely damaging several homes, including Jarrett's chalet. Its value was reduced to $135,000. Jarrett does not have insurance. Jarrett's AGI is $80,000. Jarrett's deductible loss after limitations is:
Per IRS regulation, the amount deductible, after limitation, would be the decrease in the fair market value of the personal property as a result of the casualty. In this case, the FMV is ...
This solution provides the correct answer, calculation, and explanation to the deductible loss after limitation question presented. This is based on 2013 tax law.