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man70
New Member

Does FMV after lost = FMV before lost minus the cost of repair/replacement?

I had to replace my roof in 2017 due to storm damage .
1 Reply
rjs
Level 15
Level 15

Does FMV after lost = FMV before lost minus the cost of repair/replacement?

IRS Publication 547 says the following (pages 5-6).

You can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions.

  • The repairs are actually made.
  • The repairs are necessary to bring the property back to its condition before the casualty.
  • The amount spent for repairs isn't excessive.
  • The repairs take care of the damage only.
  • The value of the property after the repairs isn't, due to the repairs, more than the value of the property before the casualty.

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