Yes it is complicated and seems overwhelming, but you can do it!! Nike says, Just do it! Just start from the tips I will give below. It is complicated, however, not as complicated as it seems. First, you do not have to reproduce your records. Whatever your total contents loss was presented to the insurance company, just subtract the reimbursed amount and claim the unreimbursed content. That is cheating but will result in the same results.
So content loss:
Total loss submitted to insurance: $104,000
Max Reimbursement: - 75,000
Net loss to claim for contents $ 29,000
if the reimbursement for the inside did not cover everything just list them. Upgrades should not be claimed. Only the expenses to restore.
Outside, the difference between reimbursement and claim or them amount spent to repair/replace.
Keep very good records on how you came up with your calculations just in case you need to provide information to the IRS.
The goal is to get a fair number that you can substantiate as not reimbursed.
OR you can use this method.
You can actually turn your return over to TurboTax Full Service.
OR
How to Determine the Amount of Loss
To determine the amount of casualty loss to claim, you must first perform two calculations: the adjusted basis and the decline in fair market value.
- Adjusted basis: First, you need to calculate the adjusted basis of your property before the damage. This means the amount you originally paid for the property, along with any associated commissions, taxes, or other expenses connected to the purchase. This basis will decrease through natural deterioration or can increase if you have improved the property. If you didn’t pay for the property but received it as a gift or inheritance, you may need to calculate the adjusted basis differently.
- Decline in fair market value: According to the IRS, fair market value means the price at which a willing buyer would purchase your property on the market. The decline in fair market value is the difference between what a buyer would pay before and after the damage from the hurricane.
Once you have both the adjusted basis and the decline in fair market value, choose the smaller amount as your hurricane loss. Once you subtract any reimbursement or insurance payments from this number, you will have the total loss to use on your tax return.
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