I:9-48 Casualty Losses. Tony is a carpenter who owns his own furniture manufacturing business.

During the current year, a tornado (a federally declared disaster) damaged several pieces of equipment and destroyed his delivery truck and his personal automobile, which he often kept in the workshop garage. The asset descriptions and related values are as follows:

Asset FMV Before Casualty FMV After Casualty Cost to Repair/Replace Adjusted Basis Insurance Proceeds Equipment A $12,300 $4,000 $ 8,700 $ 9,000 $ 3,700 Equipment B 8,100 0 9,000 3,000 7,800 Equipment C Not Available Not Available 13,800 15,300 11,400 Delivery Truck 18,000 0 32,000 17,500 16,000 Automobile 15,000 0 12,000 28,000 12,000 Although he could not obtain its fair market value after the casualties, Tony decided to repair rather than replace Equipment C.

Before considering any deductions because of these casualties, Tony’s AGI is $80,000.

What deductions may Tony take relating to these losses?