Question

This year Amy purchased $2,000 of equipment for use in her business. However, the machine was damaged in a traffic accident while Am was transporting the equipment to her business, note that because Amy did not place the equipment into service during the year, she does not claim any depreciation or cost recovery expense for the equipment.

After the accident, Amy could not replace the equipment so she had the equipment repaired for $2,300. What amount can Amy deduct for the loss of the equipment?

Deductible amount

Answer 1

given data Amy purchased equipment with $2000 .

machine was damaged in a traffic accident while Amy was transporting the equipment to her business.and she was not installed it in her business.and equipment repaired for $2300.

* here this loss is a abnormal loss .

CONCLUSION;

Amy can deduct the loss is for $2000 the purchasing price of the equipment only.because ,she did not installed it again in the business so,can't deduct repair cost.