During 2015, someone broke into Jacob\'s personal residence and took the followi

Question

During 2015, someone broke into Jacob's personal residence and took the following items:

Jacob is an employee and used the computer 100% of the time in his employment. Although his homeowner's insurance policy paid Jacob $7,000 for the stolen computer, Jacob's employer did not reimburse Jacob for any of the remainder of his loss. Jacob's AGI for the year, before considering any of the above items, is $50,000.

Determine the total deduction for the stolen items on Jacob's 2015 tax return.

Asset Adjusted
Basis FMV Before FMV After Insurance
Recovery Business computer $12,000 $10,000 0 $7,000 Bearer bonds 30,000 25,000 0 0 Silverware 7,000 20,000 0 18,000 Cash 8,000 8,000 0 0

Explanation / Answer

Total loss due to theft = $3000 + $25000 + $8000 = $36000

$36000 - $100 floor = $35900

10% Threshold of AGI = $5000

Deductible Theft loss = $35900 - $5000 = $30900

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