If rental property is completely destroyed,the amount of the loss is the adjusted basis of the property at the time of the destruction reduced by $100 ($500 in 2009)and 10% of AGI.

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The statement describes a rule for personal casualty losses, not rental property. Rental property losses are generally deductible without the $100/$500 reduction or the 10% of AGI limitation.

If Rental Property Is Completely Destroyed,the Amount of the Loss