During the current year, an office desk used by Pat in his business was completely destroyed by a fire. The adjusted basis of the desk was $900 (original cost of $1,500 less accumulated depreciation of $600). Pat received $500 from his insurance company, but he did not replace the desk.
a.What is the amount of Pat's recognized gain or loss (deduction) as a result of the casualty?
b.Assuming this is Pat's only casualty gain or loss for the year, what is the nature of the gain or loss?

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The Answer of During the current year, an office desk used by Pat in his business was completely destroyed by a fire. The adjusted basis of the desk was $900 (original cost of $1,500 less accumulated depreciation of $600). Pat received $500 from his insurance company, but he did not replace the desk.
a.What is the amount of Pat's recognized gain or loss (deduction) as a result of the casualty?
b.Assuming this is Pat's only casualty gain or loss for the year, what is the nature of the gain or loss?

During the Current Year, an Office Desk Used by Pat