Lena owns a restaurant which was damaged by a tornado. The following assets were partially destroyed: Lena has AGI of $50,000. What is the amount of Lena's deductible casualty loss?

Question

Lena owns a restaurant which was damaged by a tornado. The following assets were partially destroyed:  Lena has AGI of $50,000. What is the amount of Lena's deductible casualty loss?

Quizplus · Accepted Answer

(150,000 - 100,000) + (20,000 - 10,000) = $60,000. The amount of the loss is the lower of the property's adjusted basis or the decline in FMV, reduced by the insurance proceeds. Since the property was used in Lena's business, there is no 10% of AGI and $100 floor.

Lena Owns a Restaurant Which Was Damaged by a Tornado