Franca has AGI of $130,000 this year. After applying the $100 floor, she has $26,000 of federal disaster losses on personal assets, $12,000 of nonfederal casualty losses on personal assets, and $23,000 of personal casualty gains for the year. What is Franca's deductible casualty loss?
A) $15,000
B) $0
C) $13,000
D) $2,000
D) $2,000
Franca's nonfederal losses are applied first to reduce the personal casualty gain, and then the remaining personal casualty gain reduces the federally declared disaster loss. $23,000 gain - $12,000 nonfederal personal casualty loss = $11,000 remaining gain. $26,000 federal disaster loss - $11,000 = $15,000 net federal disaster loss. $15,000 - ($130,000 AGI × 10%) = $2,000
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