Chapter 7 – Losses And Credits Flashcards
The income tax treatment of worthless stock would be considered a ______________ loss for tax purposes.
long-term
Losses sustained by you as a taxpayer can be deducted if the property has a…
monetary value.
Losses sustained by you as a taxpayer can be deducted if the loss happen to…
you and to the property you own.
Losses sustained by you as a taxpayer can be deducted if there is an event that identifies the…
date and time of the loss.
A decline in stock value is not considered a loss. What do you have to do to claim it as a loss?
Sell the stock
Name two losses that are deductible.
Business loss (abandonment of property) Loss from a transaction for a profit gain
Can you deduct personal losses, like if you lose money when you sale your home?
No.
The following 3 things are not considered casualty losses;
Termite damage
Misplaced or accidently broken items
Intentional damage
Casualty losses are based on the lesser of ______________ of the property or the _______________ of the property.
the decline in value
adjusted basis
Any casualty losses are reduced by any insurance recovery, plus ___% of your AGI and an additional $___.
10%
$100
To claim a deduction for bad debt, the debt has to be worthless and a…
bona fide debt.
Business bad debt is consider bad debt if its related to your trade or business. This type of debt can only be deducted if the debt is _______ or _______worthless.
partially
wholly
____________ and ___________ are both included and consider bad debt.
Loans and Uncollectible accounts receivable
If a personal loan or a loan to friend becomes wholly worthless, it can be deducted as…
short-term capital loss.
An item of income must have been included in the creditor’s ___________ prior to claiming a bad deduction.
income
