In 2019, Grant's personal residence was completely destroyed by fire.He was insured for 100% of his actual loss, and he received the insurance settlement.Grant had adjusted gross income before considering the casualty item of $30,000.Pertinent data with respect to the residence follows: $$\begin{array} { l r }
\text { Cost basis } & \$ 280,000 \
\text { Value before casualty } & 250,000 \
\text { Value after casualty } & - 0 -
\end{array}$$ What is Grant's allowable casualty loss deduction?

Question

In 2019, Grant's personal residence was completely destroyed by fire.He was insured for 100% of his actual loss, and he received the insurance settlement.Grant had adjusted gross income before considering the casualty item of $30,000.Pertinent data with respect to the residence follows: $$\begin{array} { l r } 
\text { Cost basis } & \$ 280,000 \
\text { Value before casualty } & 250,000 \
\text { Value after casualty } & - 0 -
\end{array}$$ What is Grant's allowable casualty loss deduction?

Quizplus · Accepted Answer

Since Grant was insured for 100% of his actual loss and received the insurance settlement, he does not have a deductible casualty loss. The insurance compensation covers his entire loss, so there is no remaining loss to deduct.

In 2019, Grant's Personal Residence Was Completely Destroyed by Fire