Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2010, which ruined the furniture in their garage. The following items were completely destroyed and not salvageable:
Fair Market Value Prior to Damage Original Item Cost: Antique poster: $6,000 $5,000
Pool Table: 7,000 11,000
Large-screen TV: 700 2,500
Their homeowner's insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimburaement of $12,700, resulting in a net payment of $2,700. Their AGI for 2010 was $30,000.