DanielV01
Expert Alumni

Deductions & credits

It depends.  First, you may wish to see how the IRS calculates the loss, which you can read about in detail at the following link:  https://www.irs.gov/taxtopics/tc515.html.

The basic rule is this:  You claim as a loss the difference in the original value before the flood, and how much the same structure was worth after the flood.  You won't have to guess since you have exact estimates in this case.  You know what you spent to build the attachment.  This is the beginning FMV.  The casualty is the flood, and the loss is the amount it costs to return the structure to its original FMV.  In this case, the amount is 11,000 (or so).  Subtract this figure from the original value to arrive at the FMV after the flood.

You are allowed to claim this entire amount, subject to the limitations mentioned on the webpage cited above.  Even though you have not yet paid for all of the expenses, the deduction is based on the amount of loss, not on the amount paid to restore the property.

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