The destruction of a capital asset due to a casualty will result in recognition of an ordinary loss.

Name: The destruction of a capital asset due to a casualty will result in recognition of an ordinary loss.
Brand: Quizplus
Rating: 4.8 (44 reviews)

Question

Quizplus · Accepted Answer

When a capital asset is destroyed due to a casualty, such as a fire or natural disaster, the loss is recognized as an ordinary loss rather than a capital loss. This is because the loss is not incurred as a result of a sale or exchange of the asset, but rather due to an unexpected event.

The Destruction of a Capital Asset Due to a Casualty