Question

D Question 32 5 pts Sam operates a manufacturing company as a sole proprietorship. During the current year, the machinery used in the manufacturing process is totally destroyed by a fire in the building. The machinery had an adjusted basis of $16,000 and a fair market value of $11,000 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 the current year, calculate the amount of Sam's casualty loss for the current year HTML Editor 囲. E. of ER [께 vx @ 0 Y回,T T. 12pt Paragraph ' ▼

Answer 1

Sam's casualty loss for 2018 = Adjusted Basis -  reimbursement
Sam's casualty loss for 2018 = 16000 - 10000	6000