What is the amount of the casualty loss on a business truck that had a fair market value of $14,000 before an accident and $4,000 after an accident, if its adjusted basis is zero?

Question

Quizplus · Accepted Answer

The casualty loss is the lesser of the adjusted basis or the decrease in fair market value. The adjusted basis is zero, so the casualty loss is the decrease in fair market value, which is $14,000 - $4,000 = $10,000.

What Is the Amount of the Casualty Loss on a Business