Chapter 7, Problem 46P

Robert had an accident and injured a driver and her car. He has auto insurance with the minimum coverage for Illinois. He also has medical payments coverage of $1,000 and a $250 deductible on his collision coverage. The driver's injuries cost $5,000 and damages to her car cost $3,000. Robert's car had damages costing $4,000. How much will the Insurance company pay for these claims?   $12,000 $11,250 $11,750 $3,750

Don operates a taxi business, and this year one of his taxis was damaged in a traffic accident. The taxi was originally purchased for $17,500, and the adjusted basis was $1,350 at the time of the accident. The taxi was repaired at a cost of $2,825 and insurance reimbursed Don $739 of this cost. What is the amount of Don's casualty loss deduction?     Multiple Choice   $611   $2,825   $2,086   $1,350   Don is not eligible for a casualty loss deduction

Patricia is being sued for $3 million as a result of an automobile accident where she was deemed 50 percent at-fault. At the time of the loss, Patricia had an automobile policy with Globex Insurance Company and helf a liability limit of $2 million. She also had an Umbrella Policy with Eiffel Insurance Company with a $2 million Limit. If the claimant is awarded $3 million, how is the claim payment structured? A) Globex Insurance covers $2 million and Eiffel Insurance covers the remaining $1 million. B) Clobex Insurance covers $1 million and Eiffel Insurance covers the remaining $2 million. C) Globex Insurance covers $2 million and Patricia pays the remaining $1 million. D) Globex Insurance covers $1.5 million as Patricia was deemed 50 preent at fault.

Leo bought a used car for $4,500. While in class at George Brown, his car was damaged by an unidentified automobile. The damage to the vehicle was estimated at $1,000. If the cash value of Leo's car at the time of the loss is $3,000, how much money would Leo receive if he files a claim for damages? Assume he has an Ontario Automobile Insurance policy with a $500 deductible and all perils coverage. $3,000 $2,500 $1,000 $500 None of the above. He's not covered.

Marvin broke his hip in a slip and fall accident at Costco.  He received an accident settlement from Costco’s insurance company for $25,000.  He was unable to work during the two-month recovery period but was able to use the $5,000 in sick pay he had accumulated from his employer.  Marvin also received $10,000 from an accident policy he had purchased for himself.  How much of this income is taxable to Marvin.

Alma is in the business of dairy farming. During the year, one of her barns was completely destroyed by fire. The adjusted basis of the barn was $90,000. The fair market value of the barn before the fire was $75,000. The barn was insured for 95% of its fair market value, and Alma recovered this amount under the insurance policy. She has adjusted gross income of $40,000 for the year (before considering the casualty). Determine the amount of loss she can deduct on her tax return for the current year.

Paul's car sild off the icy road, causing $2.000 in damage to his car. He was also treated for minor injuries, costing $1,400. His car insurance has a $500 deductible, after which the full loss is paid His health insurance has a $250 deductible and covers 80% of medical cost. What were Paul's out-of-pocket costs from the incident? Paul's out-of-pocket costs are $(630). (Round your response to the nearest penny)

Teresa's manufacturing plant is destroyed by fire. The plant has an adjusted basis of $270,000, and Teresa receives insurance proceeds of $410,000 for the loss. Teresa reinvests $420,000 in a replacement plant within 2 years of receiving the insurance proceeds.

Linda was involved in an auto accident in which she was at fault. Her own car sustained $3,793 damages and the other vehicle cost $992 to repair. Linda was not injured, but the driver of the other car required medical treatment costing $8,968 and a passenger's injuries totaled $22,135. There was additional property damage in the amount of $3,596. Linda's policy includes 50/100/50 liability, $250 deductible collision and full coverage comprehensive. How much of the damages must Linda pay? a. $250 b. $3,543     c. $4,785 d. $39,484