For Each of the Following Situations, Determine Whether the Item

question 111

Essay

For each of the following situations, determine whether the item is deductible, and discuss any limitations that might be placed on the deduction.
Rioters damage Margarita's business building, which has an adjusted basis of $50,000, during the current year.
a.Assume the building is totally destroyed. The cost of replacing the building is estimated to be $55,000. Margarita's insurance reimburses her $32,000.
b.Assume the building is severely damaged. Before the riot, the building is worth $55,000. The insurance adjuster estimates the value of the building after the damage at $20,000. Margarita's insurance reimbursed her $32,000.

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Definitions:

Idle Workers

Employees who are not engaged in production or work activities due to lack of work, broken machinery, or inefficient job allocation, often leading to wasted resources.

Finding Suppliers

The process of identifying and selecting vendors or suppliers who can provide the necessary materials, products, or services for a business.

Customer Service

The assistance and advice provided by a company to those people who buy or use its products or services.

Supplier Management

The practice of organizing, managing, and improving the relationships and activities between a business and its suppliers to optimize their impact on the company's performance.