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Question: Esther owns a large home on the


Esther owns a large home on the Southeast Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In September 2021, a hurricane damaged many of the trees surrounding her home; her region was declared a Federal disaster area as a result of the hurricane’s damage. In October 2021, Esther engaged a local arborist to evaluate and treat the trees, but five of the largest trees were seriously weakened by the storm. These trees died from disease in 2022. Esther has ascertained that the amount of the casualty loss from the death of the five trees is $25,000; however, she is uncertain in which year to deduct this loss and has come to you for advice. Discuss whether the casualty loss should be deducted in the calculation of Esther’s 2021 or 2022 taxable income.
Partial list of research aids:
Reg. § 1.165–1.
Oregon Mesabi Corporation, 39 B.T.A. 1033 (1939).


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> Juan owns a business that acquires exotic automobiles that are high-tech, state-of-the-art vehicles with unique design features or equipment. The exotic automobiles are not licensed or set up to be used on the road. Rather, the cars are used exclusively

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> Your client, Simon Che, is an avid Texas Rangers fan. Last March at the Rangers’ home opener, as a result of a random drawing of those in attendance at the game, Simon won 300 Shipley Do-Nut coupons. Each coupon entitled him to a cup of coffee and a free

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> As a result of a cancer diagnosis in early 2021, Laura has begun chemotherapy treatments. A cancer specialist has stated that Laura has less than one year to live. She has incurred many medical bills and other general living expenses and is in need of ca

> Vito is the sole shareholder of Vito, Inc. He is also employed by the corporation. On June 30, 2021, Vito borrowed $8,000 from Vito, Inc., and on July 1, 2022, he borrowed an additional $10,000. Both loans were due on demand. No interest was charged on t

> Ridge is a generous individual. During the year, he made interest-free loans to various family members when the Federal rate was 3%. What are the tax consequences of the following loans by Ridge: a. On June 30, 2021, Ridge loaned $12,000 to his cousin, J

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> Faye, Gary, and Heidi each have a one-third interest in the FGH Partnership. The following information is available with respect to the partnership for the year and the amount allocable to each partner. Compute each partner’s gross inco

> Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Troy receives a salary of $60,000 per year. He also receives a bonus equal to 10% of all collections from clients he serviced during the year. Determine the tax co

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> Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company’s 2021 gross income assuming that the company uses any available options to defer i

> Linda and Don are married and file a joint return. In 2021, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest. a. Compute the couple’s adjusted gross income on a joint return. b. Don would like to know

> Herbert was employed for the first six months of 2021 and earned $90,000 in salary. During the next six months, he collected $8,800 of unemployment compensation, borrowed $12,000 (using his personal residence as collateral), and withdrew $2,000 from his

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> Determine the effects of the following on a cash basis taxpayer’s gross income for 2021 and 2022: a. On the morning of December 31, 2021, the taxpayer received a $1,500 check from a customer. The taxpayer did not cash the check until January 3, 2022. b.

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> Terri, age 16, is a dependent of her parents. During 2021, Terri earned $5,000 in interest income and $3,000 from part-time jobs. a. What is Terri’s taxable income? b. How much of Terri’s income is taxed at her rate? At her parent’s rate? c. Can the pare

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> During the year, Alva received dividends on her stocks as follows: Amur Corporation (a French corporation whose stock is traded on an established U.S. securities market) …………………………………..$60,000 Blaze, Inc., a Delaware corporation……………………………………. 40,000 Gra

> Euclid acquires a 7-year class asset on May 9, 2021, for $80,000 (the only asset acquired during the year). Euclid does not elect immediate expensing under § 179. She does not claim any available additional first-year depreciation. Calculate Euclid’s cos

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> Which of the following individuals are required to file a tax return for 2021? Should any of these individuals file a return even if filing is not required? Why or why not? a. Patricia, age 19, is a self-employed single individual with gross income of $5

> Morgan (age 45) is single and provides more than 50% of the support of Tammy (a family friend), Jen (a niece, age 18), and Jerold (a nephew, age 18). Both Tammy and Jen live with Morgan, but Jerold (a French citizen) lives in Canada. Morgan earns a salar

> Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest

> Walter and Nancy provide 60% of the support of their daughter (age 18) and son-in-law (age 22). The son-in-law (John) is a full-time student at a local university, and the daughter (Stella) holds various part-time jobs from which she earns $11,000. Walte

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> Wesley and Camilla (ages 90 and 88, respectively) live in an assisted care facility and for 2020 and 2021 received their support from the following sources: Percentage of Support Social Security benefits………………………………………….16% Son………………………………………………

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> Tristan, who is single, operates three sole proprietorships that generate the following information in 2021 (none are “specified services” businesses). Tristan chooses not to aggregate the businesses. She also earns $1

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> Ashley (a single taxpayer) is the owner of ABC LLC. The LLC (which reports as a sole proprietorship) generates QBI of $900,000 and is not a “specified services” business. ABC paid total W–2 wages of $300,000, and the total unadjusted basis of property he

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