Tax Research Movie Paper

Spencer Perry
ACCT 3350.001

This particular scene from Skyfall is the major battle between James Bond and Raoul
Silva. This scene takes place at Bonds home, named Skyfall. The scene encompasses several
events that have many tax implications. The scene incorporates a loss off an automobile, the loss
of a home, the loss of a helicopter, and the death of two individuals. The scene also involves the
possible inheritance of Skyfall by James Bond from his parents.
First, towards the beginning of the scene, the helicopter fires upon Bonds Aston Martin,
eventually leading to its explosion. This resulted in either a loss by Bond of his car, or a loss
upon the government, whoever owned the car at the time of its destruction. Next, Bond blew up
his own home in defense against Silva. This event has two tax outcomes: the loss of an asset by
Bond, which could involve an inheritance basis if he inherited the property from his parents. It
could also involve a loss without respect to inheritance if he did not inherit the property from his
parents. The explosion of the house caused the helicopter used by Silvas men to crash as well,
which would be a loss on Silvas part. The helicopter was being piloted by at least two men
when it crashed, so there would also be estate rules that would play into the scene, if the men
werent married, and if they were, then the filing status of their spouses would change as a result
of the incident. Also, if any persons had life insurance polices on the men that died in the
helicopter crash, then there would also be additional tax implications. Finally, if any surrounding
property owners suffered property damage or loss because of the home explosion or helicopter
crash, then they could possibly claim a loss because of the damage.
The explosion of the house was the major aspect of the scene, and there are many tax
issues that surround it. First, there would be a calculation of the amount of loss on the property.
This calculation would be completed by taking the difference between the pre-explosion basis of
the house and the post-explosion value of this house. The pre-explosion basis of the property is

determined by the cost that was incurred to acquire the land plus the cost of any improvements
that were made to the property (Internal Revenue Service, n.d. (584)). However, his basis could
be different if he inherited the property from either his parents or relatives. If the inherited the
property, then Bonds basis would be either the fair market value of the property on the date of
the relatives death, or the fair market value of the property on the alternate valuation date, if the
estates representative chose to use the alternative valuation date (Internal Revenue Service, n.d.
(551)). Also, because the home was personal property, all improvements, such as any exterior
buildings, trees, and shrubs are also included in the calculation of the loss (Internal Revenue
Service, 2015). This amount would then be offset by any reimbursements Bond might have
received if he had insurance on the home. Silva and his men clearly had the intention to deprive
Bond of his property, and making a house explode is certainly illegal. These circumstances mean
that Bond could claim the loss as a theft loss (Internal Revenue Service, 2015). The remaining
balance would the the total amount that he could deduct as a loss (Internal Revenue Service,
2015). After calculating the total amount of loss, the amount of loss that can actually be deducted
must be calculated.
The total amount of actual loss is then reduced by $100 per the $100 rule and then reduce
the total amount of the loss by 10% of Bonds adjusted gross income. Bond would report these
numbers on the IRS form 8949, Sales and Other Dispositions of Capital Assets, along with
schedule D Capital Gains and Losses. Now that the total of the loss has been calculated, the
type of loss must be determined. If Bond purchased the property, and has held it for less than one
calendar year, then the total amount of deductible loss would be classified as a short term loss
and appear on schedule D, part I, in either line 1a, 1b, 2, 3, or 4 depending on whether the
transaction was or was not reported to the Internal Revenue Service, was not reported to Bond, or

was classified as a casualty and theft loss. If the loss qualified as a casualty and theft loss then
form 4684 would also be attached (Internal Revenue Service, 2014). If bond inherited the
property, or kept it for longer than one calendar year, it would be considered a long term gain or
loss (Internal Revenue Service, n.d. (544)). The loss would then be reported on schedule D, part
II, in either line 1a, 1b, 2, or 3, or 4 depending on the same circumstances as above. The loss
would then be netted against other short term and long term gains and losses to eventually find
the overall gain or loss. If the overall amount is a loss, then $3,000 may be deducted in the
current year and the remained is carried forward to offset future income.
After all other tax burdens have been calculated, everything is calculated to determine an
overall amount that still needs to be paid, or an amount that needs to be refunded to that
taxpayer. The overall situation from the movie was still much more complex that listed, as Bond
would also have to calculate the loss of his car, if it was his, and the additional loss of any
valuable goods inside the house if they had not been covered by any form of insurance. The level
of detail present in tax forms encompasses all aspect of an asset, and all taxpayers must be able
to document their basis, improvements, and costs incurrent on all assets. The situation above
clearly caused many taxable issues, and the house explosion and loss was just one of the many.
To reduce paperwork and tax complications in the future, all valuable assets should be insured to
ensure that they taxpayer receives adequate reimbursement for their losses and doesnt have to
report a loss on the tax return. Reporting a loss on a tax return may take many years to get the
full benefit because of the $3,000 limit that applies, but a quick reimbursement by an insurance
company would not only expedite the tax process, but would also expedite the rebuilding of the
asset.

References
Internal Revenue Service. (n.d.). Publication 584 (06/2012), Casualty, Disaster, and Theft Loss
Workbook. Retrieved November 18, 2015, from Internal Revenue Service website:
https://www.irs.gov/publications/p584/ar02.html#en_US_2012_publink1000119153
Internal Revenue Service. (2014). Capital Gains and Losses [PDF]. Retrieved from
https://www.irs.gov/pub/irs-pdf/f1040sd.pdf
Internal Revenue Service. (n.d.). Publication 544 (2014), Sales and Other Dispositions of Assets.
Retrieved November 18, 2015, from Internal Revenue Service website:
https://www.irs.gov/publications/p544/ch04.html#en_US_2014_publink100072633
Internal Revenue Service. (n.d.). Publication 551 (12/2014), Basis of Assets. Retrieved
November 18, 2015, from Internal Revenue Service website:
https://www.irs.gov/publications/p551/ar02.html#en_US_201412_publink1000257012
Internal Revenue Service. (2015, March 5). Tax Topics - Topic 515 Casualty, Disaster and Theft
Losses (Including Federally Declared Disaster Areas). Retrieved November 18, 2015,
from IRS website: https://www.irs.gov/taxtopics/tc515.html