Otto operates a bakery and is on the cash method and calendar year. This year, one of Otto's ovens caught fire and was partially destroyed. Otto bought it a few years ago for $25,500 and claimed depreciation of $13,100 up to the fire. Otto was charged $3,850 for repairs to the oven but the insurance company paid Otto $1,775 for the damage. What is Otto's casualty loss deduction?

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The Answer of Otto operates a bakery and is on the cash method and calendar year. This year, one of Otto's ovens caught fire and was partially destroyed. Otto bought it a few years ago for $25,500 and claimed depreciation of $13,100 up to the fire. Otto was charged $3,850 for repairs to the oven but the insurance company paid Otto $1,775 for the damage. What is Otto's casualty loss deduction?

Otto Operates a Bakery and Is on the Cash Method