Since your claim was denied, you have no insurance payments to mix into your answers. A little more straight forward - let's look at the steps to determine the allowable loss.
Step 1 - Determine decrease in Fair Market Value (FMV)
if you had your house up for sale the day before the hurricane, what would the list price be? You can ask a realtor, look at comparable homes for sale in your area, maybe you know.
Then, determine what the fair market value is after the storm. This might take an appraiser, a realtor. Depending on the damage, fix a fence, it could be the repair value. The repair bill may represent the decreased value but not necessarily.
Step 1 FMV before storm - FMV after storm creates the decrease in FMV.
Step 2 - Determine your adjusted basis
How much you paid for the house plus improvements minus depreciation if you had office in home or used it as a s rental.
Step 3 - The casualty loss is generally the lesser of:
- The decrease in FMV of the property due to the casualty.
- Your adjusted basis in the property.
Step 4 - claim the amount from step 3 as your casualty loss.
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