This year, Amy purchased $2,780 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy 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. Problem 9-57 Part-b (Algo) b. Suppose that after the accident, Amy repaired the equipment for $3,890. What amount can Amy deduct for the loss of the equipment? c. Suppose that after the accident, Amy could not replace the equipment so she had the equipment repaired for $3,800. What amount can Amy deduct for the loss of the equipment?
This year, Amy purchased $2,780 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy 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.
Problem 9-57 Part-b (Algo)
b. Suppose that after the accident, Amy repaired the equipment for $3,890. What amount can Amy deduct for the loss of the equipment?
c. Suppose that after the accident, Amy could not replace the equipment so she had the equipment repaired for $3,800. What amount can Amy deduct for the loss of the equipment?
Casualty Loss:
A casualty loss happens when an unusual occurrence lowers the asset's worth for the company. The abrupt decline in the asset's recorded value is what causes this type of loss to increase. Losses due to casualties can occur due to theft, accidents, fires, and natural disasters.
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