One month before she died on April 14, 2002, Barbara Gent (Amy's aunt) gave Amy a coin collection. Based on careful records that Barbara kept, the collection had a cost basis of $9,000 and a fair market value of $18,000 at the time Barbara passed away. On February 19, 2011, The Smith residence was burglarized and the coin collection was stolen. The Smiths filed a claim for $24,000 (the current value of the collection) with the carrier of their homeowner's insurance policy. All they were able to collect, however, was $10,000, which was the maximum amount allowed for valuables without a special rider.
In addition to those previously noted, the Smiths' receipts during 2011 are summarized below.
a. Payments to David for services rendered $120,000
b. Income tax refunds for tax year 2012
i. Federal 1,000
ii. State 120
c. Interest Income
i. Virginia general purpose bonds 1,400
ii. IBM corporate bonds 1,200
iii. Certificate of deposit 800
d. Qualified dividends 750
e. Cash gifts from David's sister 24,000
f. David's net state lottery gains (winnings $1,000; losses $900) 100