Heather owns a two-story building. The building is used 40% for business use and 60% for personal use. During 2013, a fire caused major damage to the building and its contents. Heather purchased the building for $800,000 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 $900,000. Immediately after the fire, the fair market value was $200,000. The insur- ance 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 Heathers AGI is $100,000 before considering the effects of the fire, determine her itemized deduction as a result of the fire. Also determine Heathers AGI.
Sam, age 45, is single. For 2013, he has the following items:
Business income $70,000 Business expenses 75,000 Alimony paid 12,000 Interest income 3,000 Itemized deductions 8,000
a. Determine Sams taxable income for 2013. b. Determine Sams NOL for 2013.