Determine taxable income for the current year

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Olaf owns a 500 acre farm in Minnesota, a tornado hit and destroyed a farm building and equipment and damaged a barn. He had previously harvested his corn corp.

Building Adjusted basis $90,000 FMV before $70,000 FMV afer $0 Insurance proceeds $70,000
Equipment Adjusted basis $40,000 FMV before 50,000 FMV after $0 insurance proceeds $25,000
Barn adjusted basis $90,000 FMV before $120,000 FMV after $70,000 insurance proceeds $25,000

Olaf files joint return with wife. her taxable income is $174,000 last year - their taxable income for the current year excluding the loss from tornadao is $250,000. Evaluate the amount of Olaf and Anna's loss and the year in which they should take the loss

Reference no: EM1376487

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