What is the amount of Pascal's deductible casualty loss after his automobile was damaged?

To determine the deductible casualty loss in this scenario, several key factors must be considered including the extent of damage to the automobile, its fair market value before and after the casualty event, and the specific tax rules governing casualty losses.

Casualty losses must be calculated based on the decrease in value of the property due to the casualty, which is typically represented by the lower of the adjusted basis (the cost of the vehicle) or the decrease in fair market value due to the incident. Additionally, any insurance reimbursements received must be subtracted from the calculated loss, as only the out-of-pocket loss can be claimed.

For Pascal, given that his deductible loss has been determined to be $1,400, this figure likely reflects the specific allowable deduction after accounting for his vehicle's decrease in value, any insurance recoveries, and adhering to the IRS guidelines that apply to casualty losses. There are also thresholds, such as the requirement that the loss exceeds $100, and potential limitations on deductibility based on total casualty losses exceeding 10% of adjusted gross income, which can come into play but do not seem to apply directly in this situation.

In summary, the deductible casualty loss of $1,400 is calculated based on the loss incurred from the damage