When the taxpayer anticipates a full recovery on a casualty loss of business property but receives less than full recovery in a subsequent year,the unrecovered portion may be deducted.

Question

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This is correct according to IRS guidelines. If a taxpayer anticipates a full recovery for a casualty loss of business property but receives less than full recovery in a later year, they may deduct the unrecovered portion in the year it becomes clear that full recovery will not be received.

When the Taxpayer Anticipates a Full Recovery on a Casualty