Ann Jones uses a dry cleaning machine in her business, and it was partially destroyed by ﬁre. At the time of the ﬁre, the adjusted basis was $20,000 and its fair market value was $18,000. fte adjusted basis after the ﬁre is $10,000 and the fair market value after the casualty is $10,000. How much is the casualty loss?

Question

Quizplus · Accepted Answer

If business or investment property is partially destroyed in a casualty, the amount of the loss is the lesser of adjusted basis or decline in fair market value

Ann Jones Uses a Dry Cleaning Machine in Her Business