[Isaac]

I understand the casualty loss calculation for individuals:

FMV Before the Loss $200,000

FMV After the Loss (150,000)

Decrease in the Value 50,000

Adjusted Basis 30,000

You take the smaller of these two numbers: 30,000

subtract insurance proceeds (10,000)

$100 for each casualty (100)

10% of AGI (5000)

This amount is your loss 14,900

However, I don’t understand Casualty Losses for Corporations. Can someone help me?

FAR...80...Yaeger...Nov/2011
AUD...Exam...Oct/2012
REG
BEC

[Anonymous]

There is no threshold/limit for corporations. As such, a corp would recognize a loss of $20,000

[forever4]

Lower of decline in value or fv after loss – adjusted basis = casualty loss deduction.

Thats the formular for corp casualty loss! 🙂

FAR 5/14 88 PASSED!
REG 7/13 74 :((((((((....! I cant believe it!!!! I studied so hard...
REG retake 11/29 -> 89!!!!!!!!!!!!!!!!!!!
BEC 10/11/12 -> 84!!!!!!!!!!!!!
AUD 10/25/12 -> 95!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I'm DONE! OMG 8 months of hard work.

I SHALL PASS. BECAUSE IT'S ME, SO EVERYTHING WILL BE OK!

[nearly_there]

Remember casulty loss for individuals is a below-the-line itemized deduction. With the rules you descrived.

For businesses, its an above the line deduction. With no floor or limit and it can result in a NOL.

The amount of deduction is the lower of the drop of FMV before and after caualty or AB of the asset.

HTH

FAR - 85 November 2011
AUD - 81 January 2012
REG - 68 March 2012
BEC - 86 April 2012
REG - 92 July 2012

[Isaac]

Thanks everyone for your help. Corporate casualty loss is same as individuals, except there is no $100 floor and no 10% of AGI subtractions…….GOT IT.

FAR...80...Yaeger...Nov/2011
AUD...Exam...Oct/2012
REG
BEC

[Anonymous]

To add, its on page R3-16 of Becker 2011 book if you wanted to read up on it :).

[Author]

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