Personal Casualty Loss
Response to the following problem:
The Tavels left for vacation on December 18, 2013. When they returned home on January 4, 2014, they found their home had been burglarized. Taken from their home were a high definition TV worth $4,000 and artwork worth $22,500. The Tavels had purchased the TV a few months ago for $5,600. They had purchased the artwork for $8,400 in 2004. Unfortunately, the Tavels allowed their homeowners' insurance to lapse last year. The Tavels' AGI in 2013 and 2014 is $83,000 and $92,000, respectively
a. In which year can the Tavels claim a casualty and theft loss deduction?
b. Compute the Tavels' casualty and theft loss deduction.
c. How would your answer to Part b. change if the Tavels had insured the artwork and received $7,500 from the insurance company for their loss?