In 2017 Jordan has some damages on his business property whe

In 2017, Jordan has some damages on his business property when tornado hit his area.  Her truck was used 100 percent for business use in her sole proprietorship.  The truck had originally cost $35,000 and she had taken $5,000 depreciation.  At the time of the disaster, it was worth $25,000. After the accident, it was $0.  She received insurance company’s payment of $20,000.

How much is her deducible casualty loss ?

What is her deductible casualty loss if the property’s residual value was $5,000?

Solution

Original Cost    35,000.00 Less: Residual Value (Given)      5,000.00 Depreciable Amount    30,000.00 Less: Depreciation (Given)      5,000.00 Remaining Depreciable Value    25,000.00 (Value at the time of Disaster) Less: Insurance Claim Received    20,000.00 Deductible Casualty Loss      5,000.00