Exeter Savings and Loan is located in a two-story building in downtown Exeter. The building has a
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This is the second time in ten years that the basement has flooded. The state and county conducted a flood control study after the first flood but adopted no formal flood control plans. Fearful of another flood, the bank now stores all its records on the first and second floors.
The bank has claimed a casualty loss for the damaged records and equipment, and the decline in the market value of the building. It contends that because the basement of the building can no longer be used for storage, it is entitled to a casualty loss equal to the difference between the fair market value of the building before the casualty and the fair market value after the casualty. Explain whether Exeter Savings and Loan can deduct as a casualty loss the building’s decline in fair market value.
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Related Book For
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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