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New Member
posted Mar 7, 2021 3:56:39 PM

How do I determine the before and after fair market value of items lost in a fire... like the coffee maker, tv, surge protectors?

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4 Replies
Level 15
Mar 7, 2021 4:43:52 PM

the fair market value of such items after a fire is zero.

New Member
Mar 13, 2021 11:48:45 AM

What about determining the fair market value before the fire?

Expert Alumni
Mar 15, 2021 9:27:23 AM

You would need to consider each item's age and condition.  

 

The fair market value is the amount that a willing buyer would pay for the item and a willing seller would accept as payment.  

 

@randb324

Level 15
Mar 15, 2021 9:41:16 AM

The value of a property or item before a fire, is usually more than $0. It will be the price a willing buyer would pay, and the seller would accept. For small items, think more like pricing items for a garage sale.

The value of a property or item after the fire is usually $0 if the item was no longer usable for it's intended purpose.

However, that's not true for real estate. Here's why.

When your rental property burns to the ground and is declared a total loss by the insurance company, then it is a total loss for the insurance company. But it's not a total loss for you. You still have the land and that land still retains it's value.  The insurance company has only insured the structure; not the land. So if the house burns to the ground, from the insurance company's perspective, it's a total loss "for them". You don't lose a penny of value in the land.