Blue Rock. Inc. experienced a casualty loss in $2021.$ Their warehouse was completely destroyed. Their adjusted basis in the warehouse was $$700,000.$ The fair market value before the casualty loss was $$800,000.$ They filed an insurance claim on the destroyed property. At the end of $2021,$ they were certain that the insurance company was not going to give them any proceeds for the destroyed warehouse and have written documentation from the insurance company stating so$.$ However, in $2022$ they received $$700,000$ of insurance proceeds for the destroyed warehouse.

 How much may Blue Rock Inc. claim as a deduction for the destruction of the warehouse in $2021?$ Please explain you answer.  

 

 

 

 

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Blue Rock Inc may claim a casualty loss deduction for the destruction of the warehouse in 2021 The a... View the full answer