3. Calculate the amount of the casualty loss deduction, if any, that would claimed given that a business warehouse was completely destroyed by fire:

FMV of the warehouse before the fire $600,000

FMV of the warehouse after the fire $0

Basis of the warehouse $500,000

Insurance recovery $400,000

4. Assume the same facts as in (3) above except that the warehouse was not completely destroyed and the FMV of the warehouse after the fire was

$450,000 and the insurance recovery was $100,000. Now what would be the amount of the casualty loss deduction?

5. Assume the same facts as in (4) above except the destroyed property was a personal residence and that the fire was declared a Presidential disaster. Now calculate the amount of the deductible loss assuming the taxpayer's AGI was $200,000.

6. Briefly recap the current rules applicable to net operating losses. How much of the NOL is currently deductible and what happens to unused losses.