Sam operates a manufacturing company as a sole proprietorship. During 2014, the machinery used in the manufacturing process is totally destroyed by a fire in the building. The machinery had an adjusted basis of $18,000 and a fair market value of $12,000 on the date of the fire. The machinery was insured and Sam receives $10,000 from the insurance company. Sam does not replace the machinery. Assuming Sam has adjusted gross income of $60,000 for 2014, calculate the amount of Sam's casualty loss for 2014.

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The Answer of Sam operates a manufacturing company as a sole proprietorship. During 2014, the machinery used in the manufacturing process is totally destroyed by a fire in the building. The machinery had an adjusted basis of $18,000 and a fair market value of $12,000 on the date of the fire. The machinery was insured and Sam receives $10,000 from the insurance company. Sam does not replace the machinery. Assuming Sam has adjusted gross income of $60,000 for 2014, calculate the amount of Sam's casualty loss for 2014.

Sam Operates a Manufacturing Company as a Sole Proprietorship