@telleraklaq54 wrote:
what if my insurance bought it out?
If your insurance paid off the car, your only loss would be your insurance deductible. For reasons already explained, you can list your out of pocket deductible as a tax loss, but you probably won't get an actual tax benefit.
(I assume here the insurance paid the fair market value for the car—what you could have sold it for as a used car with the same, make, model, mileage and condition before the storm. If you want to argue that the car was worth more than the payout, that might represent a larger loss, but if you are audited, you will need ironclad proof that the insurance company lowballed you, if you can't convince the IRS auditor of the true value of the car, you will be assessed back taxes and penalties.)
