Casualty Loss

[ILLMAS]

TP had flooding to her personal residence, insurance co. paid for some of the repairs, and I am trying to fill out form 4684 but I am sort of confused, can someone that has filled one out assist me? Here are area I am having trouble with:

1. Descripton of properties Type: would this be were I put flooding? And is date acquired necessary?

2. Cost or other basis of each property: The total cost of the damage was $24,900

3. Insurance or other reimbursement: Insurance co. paid for $19,100 out of the $24,900, but TP had to pay $3500 for deductible

4. Gain from casualt: 0, TP was out $9,300 out of her pocket

5. FMV before casualty: I am using what the insurance company appraised $24,900

6. FMV after casualty: Again I am using the insurance company appraisal, TP was not better off, became whole again.

7. Subtract line 6 from line 5: Since I am using the same amounts I get zero

To recap, TP basement got flooded, insurance valued the damage to be $24,900, insurance only paid $19,100 difference of $5,800 + $3,500 for insurance deductible = $9,300

[kcjenkins]

Line 1 would be Personal Residence, address, year purchased, date of disaster. If you use the Input tab, you can use the ? help button to pull up the instructions and it will jump to the section related to that line.

[jainen]

>>FMV before casualty: I am using what the insurance company appraised $24,900<<

Insurance typically uses the cost of repair or replacement as the amount of damage. The casualty rule uses the loss in FMV, so it wants you to record the value of the undamaged property before the event with the value after. In many cases the difference will equal the cost to restore it, but in my opinion that should not be assumed. If for example the basement was already in terrible condition and needed a complete restoration anyway, flooding might not make it worth less. On the other hand, minor staining might cost little to repair yet have a significant adverse affect on potential buyers.

[TAXBILLY]

>>To recap, TP basement got flooded, insurance valued the damage to be $24,900, insurance only paid $19,100 difference of $5,800 + $3,500 for insurance deductible = $9,300<<

Isn't the loss $24,900 - $19,100 = $5800?

taxbilly