Ford's loss deduction for the year is $1,000.
Ford's adjusted basis is $4,000. The fair market value of the car before the vandalism is $8,000, and the fair market value of the property after the vandalism is $3,500. The difference between the fair market value of the property before the vandalism and the fair market value of the property after the vandalism is $8,000 - $3,500 = $4,500. Ford's loss deduction is the difference between the adjusted basis and the difference between the fair market value of the property before the vandalism and the fair market value of the property after the vandalism. Ford's loss deduction is $4,000 - $4,500 = $1,000.