Taxpayer has a piece of equipment used in their trade or business destroyed by a weather- related incident. The equipment is not covered by insurance or any warranty. The equipment had a fair market value of $20,000 and an adjusted basis of $16,000. What amount of loss may Taxpayer be able to deduct under I.R.C. 165? O Taxpayer is entitled to deduct $20,000, the amount of their economic loss. O Taxpayer is entitled to deduct $16,000, the adjusted basis of the equipment. O Taxpayer is entitled to deduct $4,000, the difference between the fair market value and its adjusted basis. O Taxpayer is not entitled to a deduction, as casualty losses are not available to taxpayers engaged in a trade or business.

Taxpayer has a piece of equipment used in their trade or business destroyed by a weatherrelated incident. The equipment is not covered by insurance or any warranty. The equipment had a fair market value of $20,000 and an adjusted basis of $16,000. What amount of loss may Taxpayer be able to deduct under I.R.C. $165 ? Taxpayer is entitled to deduct $20,000, the amount of their economic loss: Taxpayer is entitled to deduct $16,000, the adjusted basis of the equipment. Taxpayer is entitied to deduct $4,000, the difference between the fair market value and its adjusted basis. Taxpayer is not entitled to a deduction, as casualty losses are not available to taxpayers engaged in a trade or business