Connor's house burns down in a wildfire. The wildfire was a federally-declared disaster. Connor is self-employed as an attorney. A business computer and a personal computer are destroyed. The business computer was worth $18,000 at the time of the fire (Connor originally paid $24,000 for it). The personal computer was worth $4,000 at the time of the fire (Connor originally paid $5,000 for it). Connor receives $1,000 in insurance proceeds for the business computer and $500 in insurance proceeds for the personal computer. Connor's AGI is $50,000 (before considering the business casualty loss).

Fair Fair Amount of Market Insurance Asset Adjusted Market Casualty Loss Basis Value Value Recovery Before After (before adjustment) Business Computer Personal Computer Total Deductible Casualty Loss