McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 35

A casualty loss from the complete destruction of a personal asset is limited to the lesser of fair market value or the property's adjusted basis.Explain the rationale for this rule as opposed to just allowing a deduction for the basis of the asset.