John\'s apartment was broken into in 2015 and the following items were stolen: S

ID: 2469321 • Letter: J

Question

John's apartment was broken into in 2015 and the following items were stolen: Securities worth $25,000. John purchased the securities four years ago for $20,000. New tools which John had purchased two weeks earlier for $8,000. John uses the tools in making repairs at an apartment house that he owns and manages. An antique worth $15,000. John inherited the antique (a family keepsake) when the property was worth $11,000. John’s homeowner’s policy had a $50,000 deductible clause for thefts. If John’s salary for the year is $50,000, determine the amount of his itemized deductions as a result of the theft.

Explanation / Answer

Determine the amount of his itemized deduction as a result of the theft:

Details

Amount

AGI

$ 50,000

Total loss:

Securities

$ 25,000

New tools

$ 8,000

Antique

$ 11,000

$ 44,000

Subtract $100 for each loss event

$ (300)

Subtract 10% of AGI ($50,000 *10%)

$ (5,000)

Tentative deduction

$ 38,700

Deduction for loss personal property = Loss amount -$100-10% of AGI