Rock Inc. operates a bakery and is on the cash method and calendar year. This year one of Rock's ovens caught fire and was partially destroyed. Rock purchased it a few years ago for $20,000 and claimed depreciation of $12,000 up to the fire. Rock was charged $4,400 for repairs but the insurance company paid Rock $1,500 for the damage. What is Rock's casualty loss deduction? What is Rock's casualty loss deduction if the oven is totally destroyed and Rock need to purchase a replacement oven?
