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This summer,Rick's home (which has a basis of $80,000) is damaged by a tornado.An appraisal by a realtor placed the FMV of the home at $120,000 before the tornado and at $85,000 after the tornado.Rick estimates that the insurance company will reimburse him for 60% of the loss.Next year,the insurance company pays Rick $20,000.Rick's current year's AGI is $50,000 and his next year's AGI is $55,000.Rick suffers no other casualty losses in either year.After limitations,Rick may deduct a casualty loss this year of
Raw Materials
Basic inputs and resources used in the manufacturing process to produce finished goods.
Cotter Pins
A pin or fastener used to secure two components together, preventing motion or separation after installation.
Indirect Materials
Materials used in the production process that cannot be directly traced to specific finished products.
Direct Materials
The raw materials directly used in the production of goods.
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