Riley operates a plumbing business and this year the 3-year old van he used in the business was destroyed in a traffic accident. The van was originally purchased for$20,000 and the adjusted basis was $5,800 at the time of the accident. Although the van was worth $6,000 at the time of accident, insurance only paid Riley $1,200 for the loss. What is the amount of Riley's casualty loss deduction?

Question

Quizplus · Accepted Answer

The casualty loss deduction is calculated as the adjusted basis ($5,800) minus the insurance reimbursement ($1,200), resulting in a deduction of $4,600.

Riley Operates a Plumbing Business and This Year the 3-Year