LTCG for Casualty Gain w Asset Still in Service?
Casualty Gain & Asset Still in Service
Machine damaged by customer. Cost to repair $10,000. Insurance company paid $103,000, because they treated the damage as a total loss & the policy was for replacement cost. Original cost of asset $88,000. A/D to date of accident was $55,000. The asset is still in service, with only a very brief suspension of use while the repairs were performed. I have entered the 4684 Casualty on the disposition screen (not the asset screen) as "Machine-Accident Damage" - I used the date in service of the machine as the Date Acquired, and the $10,000 as the cost basis. This flows through to yield LTCG treatment. Has anyone had a similar situation? I don't want to do a disservice to my client, but I don't want to set up a treatment to which he is not entitled.
