Determine her itemized deduction


Heather owns a two-story building. The building is used 40% for business use and 60% for personal use. During 2012, a fire caused major damage to the building and its contents. Heather purchased the building for $80,000 and has taken depreciation of $100,000 on the business portion. At the time of the fire, the building had a fair market value of $90,000 on the business. Immediately after the fire, the fair market value was $200,000. The insurance recovery on the building was $600,000. The contents of the building were insured for any loss at fair market value. The business assets had an adjusted basis of $220,000 and a fair market value of $175,000. These assets were totally destroyed. The personal use assets had an adjusted basis of $ 50,000 and a fair market value of $65,000. These assets were also totally destroyed. If Heather's AGI is $100,000 before considering the effects of the fire, determine her itemized deduction as a result of the fire. Also, determine Heather's AGI.

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Accounting Basics: Determine her itemized deduction
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