Derrick owns a farm in eastern north carolina. a hurricane hit the area and destroyed a farm building and some farm equipment and damaged a barn.


tem adjusted basis fmv before damage fmv after damage insurance proceeds

building $ 105,200 $ 142,000 $ 0 $ 68,400

equipment 83,800 64,000 0 15,400

barn 128,800 204,100 128,800 54,400

due to the extensive damage throughout the area, the president of the united states declared all areas affected by the hurricane as a disaster area. derrick, who files a joint return with his wife, had $65,100 of taxable income last year. their taxable income for the current year is $210,300, excluding the loss from the hurricane.


a-1. calculate the amount of the loss deductible by derrick and his wife?


a-2. what amount of loss should be adjusted against current and last year?