Should I figure my cost basis for my house damage deduction based on original purchaSE price of 272,500 in 1989, or at valued price of 623,000 in 2017?
I want to get the maximum/proper deduction for Hurricane Irma damage and am not sure how to calculate fair market value of my house and property. House cost $272,500 in 1989. It is valued at $630,000 today, It sustained $20,000 damage. Thanks! Pat
Fair market value (FMV) is the 630,000 dollars for which the home is valued today. Cost basis is the 272,500 dollar purchase price from 1989.
The casualty loss is calculated by taking the lesser of your cost basis or the difference between the value of the home before and after the casualty event (after Hurricane Irma).
