Joahn’s car, which he uses 100% for personal purposes, was completely destroyed

Question

Joahn’s car, which he uses 100% for personal purposes, was completely destroyed in an accident in 2016. The car’s adjusted basis at the time of the accident was $13,000. Its fair market value was $10,000. The car was covered by a $2,000 deductible insurance policy. John did not file a claim against the insurance policy because of a fear that reporting the accident would result in a substantial increase in his insurance rates. His adjusted gross income was $14,000 (before considering the loss). What is John’s deductible loss?

Explanation / Answer

As per Income Tax Act 1961

Conclusion : Jhon doesn't allow deduction as a loss .

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