Form 4684 On September l, 2013, a garage that had been purchased for $25,000 on July 1, 2004 and used exclusively for Mr. Warden's business was damaged by fire. In order to repair the garage after the fire, Mr. Warden spent $7,905. The repairs are considered to be an improvement to the property, which, prior to the casualty, was being depreciated under the MARCS method for nonresidential property. The amount of depreciation claimed prior to 2013 was $5,422. Mr. Warden uses Form 4684, Section B, to determine the recognized casualty gain or loss from the fire damage to the garage. Assume that the fair market value of the garage was $24,650 before the fire and it had a fair market value immediately after the fire of $14,760. Assume, in completing Form 4684, that the total amount of depreciation that Mr. Warden had claimed for the garage up to the date of the fire was $5,876 and that he had received $5,000 from a fire insurance policy he had on the garage. r the fire, and taking into account the allowable loss deduction, the cost of repair and the insurance recovery, the new adjusted basis of the garage for depreciation purposes is $22,029. Since the basis had to be adjusted, the garage will be depreciated on a straight-line method for the remainder of the original depreciation period. The allowable MACRS deduction for 2013 would be calculated based on a rate of 3.33% per year using a mid-month convention.