Which of the following events would produce a deductible loss? a. Damages to personal automobile resulting from a taxpayer's willful negligence b. Damage to landscaping around a personal residence c. A fire at a personal residence and the outbuildings on the property d. Termite infestation of a personal residence over a several-year period e. Erosion of drainage ditch due to rain or wind

Question

Wolfie

Business

20 September, 00:53

Which of the following events would produce a deductible loss? a. Damages to personal automobile resulting from a taxpayer's willful negligence b. Damage to landscaping around a personal residence c. A fire at a personal residence and the outbuildings on the property d. Termite infestation of a personal residence over a several-year period e. Erosion of drainage ditch due to rain or wind

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Answers (1)

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Raphael Pham · Answer 1

c. A fire at a personal residence and the outbuildings on the property

Explanation:

The tax deductible for loss are all those caused by a circumstantial event and unexpected but that is identifiable and can be proven. According to IRC, there are 3 types of losses that may apply: Disaster Area Losses, Casualty Losses and Theft Losses. Also the IRC stated that the loss should not have been compensated by the insurance and must be assumed during the taxable year.

According to the above, the event that would apply for a deductive loss would be answer C) A fire at a personal residence and the outbuildings on the property since it is a Casualty Loss.