Zeta, Inc. Casualty Loss Tax Deduction Calculation

Zeta, Inc. Casualty Loss Tax Deduction Calculation

Zeta, Inc., a calendar year taxpayer, suffers a casualty loss of $45,000. Zeta recovered insurance of $30,000. How much of the casualty loss will be a tax deduction to Zeta, Inc.

Question:

How much of the casualty loss will be a tax deduction to Zeta, Inc.?

Answer:

$15,000

Explanation:

Calculation to determine How much of the casualty loss will be a tax deduction to Zeta, Inc.

Using this formula

Casualty loss tax deduction = Casualty loss - Insurance recovered

Let's plug in the numbers

Casualty loss tax deduction = $45,000 - $30,000

Casualty loss tax deduction = $15,000

Therefore, the amount of the casualty loss that will be a tax deduction to Zeta, Inc. is $15,000

Final Answer:

Zeta, Inc. can deduct a tax deduction of $15,000 for the casualty loss.

Explanation:

Zeta, Inc. can deduct the amount of the casualty loss that was not covered by insurance. In this case, Zeta suffered a casualty loss of $45,000 and recovered insurance of $30,000. Therefore, the amount of the casualty loss that will be a tax deduction to Zeta, Inc. is the difference between the loss and the insurance recovery, which is $45,000 - $30,000 = $15,000.