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Olaf lives in the state of Minnesota. In May 2022, a tornado hit the area and damaged his home
and automobile. Applicable information is as follows: Because of the extensive damage caused
by the tornado, the President designated the area a Federal disaster area. Olaf and his wife, Anna,
always file a joint return. Their 2021 tax return shows AGI of $180,000 and taxable income of
$145,000. In 2022, their return shows AGI of $300,000 and taxable income (exclusive of the
casualty loss deduction) of $245,000. Determine the amount of Olaf and Anna's loss and the year
in which they should take the loss.

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