35 Miss. Admin. Code Pt. III, Subpt. 6, Ch. 02 — Casualty Losses Incurred in a Trade or Business

100 Except as otherwise provided, any loss arising from fire, storm, shipwreck or other casualty
is allowable as a deduction for the taxable year in which the loss is sustained.
101 In determining the amount of loss deductible under this regulation, the fair market value of
the property immediately before and immediately after the casualty shall generally be
ascertained by competent appraisal. This appraisal must recognize the effects of any
general market decline affecting undamaged as well as damaged property which may occur
simultaneously with the casualty, in order that any deduction under this regulation shall be
limited to the actual loss resulting from damage to the property.
102 In the case of property which originally was not used in the trade or business or for
income-producing purposes and which is thereafter converted to either of such uses, the fair
market value of the property on the date of conversion, if less than the adjusted basis of the
property at such time, shall be used, after making proper adjustments in respect of basis, as
the basis for determining the amount of loss.
103 The amount of loss to be taken into account for purposes of this regulation shall be the
lesser of either:

# 1.

The amount which is equal to the fair market value of the property immediately
before the casualty reduced by the fair market value of the property immediately
after the casualty; or

# 2.

The amount of the adjusted basis for determining the loss from the sale or other
disposition of the property involved.
104 However, if the property used in a trade or business or held for the production of income is
totally destroyed by casualty, and if the fair market value of such property immediately
before the casualty is less than the adjusted basis of such property, the amount of the
adjusted basis of such property shall be treated as the amount of the loss.
105 A casualty loss incurred in a trade or business for profit shall be determined by references
to the single, identifiable property damaged or destroyed. Thus, for example, in
determining the fair market value of the property before and after the casualty in a case
where damage by casualty has occurred to a building and ornamental trees used in a trade
or business, the loss is computed separately for the building and separately for the trees.
This rule does not apply to non-business property.
106 Casualty losses incurred in a trade or business are not subject to the $100 floor, however,
where property is used partially for business and partially for personal purposes, the $100
floor would apply to the portion of the property used for personal purposes. Casualty losses
to property connected with a trade or business may be deducted in the taxable year in
which the loss occurred. Such business casualty loss may give rise to a "net operating loss"
deduction for the taxable year; however, a casualty loss to property used in a trade or
business does not give rise to a "net operating loss" deduction as provided for individuals.
107 For rules relating to net operating loss carryovers, see regulation on net operating losses.
108 (Reserved)
109 (Reserved)
Subpart 07 Individuals