Disaster credit

[Bulldogs72]

I wanted to find out. My area is considered a disaster area. After hurricane Milton, but I was not able to get damages repaired. My insurance company did not take care of anything and that's why things are not repaired. Am I able to give those amounts for repairs, from quotes that I have on my taxes to be tax deductible?

[MindyB]

It depends.  You cannot use those quotes specifically, but you can deduct the fair market value decrease of your home due to the hurricane.  You must reduce the loss by insurance payments, and you must have already applied for any available insurance reimbursement.  If they have already denied your coverage, then that would not apply.

The fair market value before the casualty or loss equals what the house would have sold for immediately before the hurricane. The fair market value after the casualty is what the house or item would have sold for on the market after the storm. 

For more information,  refer to  IRS Pub 547 and also What if I have property that was lost or damaged (a casualty loss)?

[Bulldogs72]

They already denied my claim because I didn't meet my deductible. I don't know what the fairer market value of my home is before or after. How would I know that?

[AmyC]

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.