Riley operates a plumbing business and this year the 3-year old van he used in the business was destroyed in a traffic accident. The van was originally purchased for $22,600 and the adjusted basis was $5,475 at the time of the accident. Although the van was worth $6,260 at the time of accident, insurance only paid Riley $1,525 for the loss. What is the amount of Riley's casualty loss deduction?

$5,105

$3,950

$6,260

$16,340

$5,475