Gordon is the sole proprietor of Fashion Flowers & Florals (FFF). During the current year, one of

Question:

Gordon is the sole proprietor of Fashion Flowers & Florals (FFF). During the current year, one of FFF's delivery vans is involved in an automobile accident. The van has a basis of $6,000. What is FFF's allowable casualty loss deduction under each of the following situations?
a. A comparable van sells for $4,000. FFF's van was totally destroyed in the accident. FFF's insurance pays $2,200 on the casualty.
b. A comparable van sells for $8,400. FFF's van was totally destroyed in the accident. FFF's insurance pays $6,400 on the casualty.