Hurricane Beryl (July 2024) damaged my newly purchased rental home roof. House was bought just a week earlier. So I know exactly the FMV before the hurricane. Let's call it $400K.
Roof repair estimate was $15,000.
Since my agent was still helping me find tenants, she said the AFTER FMV would be $400K-$15K = $385K since any buyer at this point would want to new roof. Simple right?
Because I had spent all my cash on the purchase, I decided to just do the minimum fix of the roof for $1K to stop the water leaks. In other words I spent $1K on the temporary repair. Per my agent, no buyer would've paid me more then $385K since the roof was still damaged (shingles blown away, but not leaking).
Question: On Form 4684, Section B, is it safe to take $15K deduction based on $385K FMV post the disaster?
OR
Do I take $1K deduction because that's what I actually spent on the repair?
Note: No insurance, no reimbursement or anything coming. Pure rental property, nothing to do with any personal property or MAGI. Did not do appraisal after the hurricane.
