topic Can someone claim casualty loss when selling primary residence? in Deductions & credits

Can someone claim casualty loss when selling primary residence?

fganter — Sat, 01 Mar 2025 08:09:32 GMT

Primary residence (house) was damaged during Hurricane Helene (FEMA disaster) in 2024 and fair market value declined 20%.
Same year house was sold
When entering the house sale in Turbotax, the sales price, which obviously reflected the FMV, was used.

It seems to me, this is the extent for which the decline in FMV can be claimed on the tax return. The decline cannot also be included as a casualty loss. Correct?

Re: Can someone claim casualty loss when selling primary residence?

DianeW777 — Sat, 01 Mar 2025 14:31:01 GMT

No, the decline in fair market value that affects the sales price cannot be the casualty loss. Also, a personal loss from the sale of your home will not be allowed to be used against any other income on your tax return.

The casualty loss is the actual loss cost to restore the property to it's original condition when it is in a federally declared disaster area such as the Hurricane Helene you reference.

Deductible losses.

For tax years 2018 through 2025, if you are an individual, casualty losses of personal-use property are deductible only if the loss is attributable to a federally declared disaster (federal casualty loss). Personal-use property is other than business property or income-producing property.

The actual loss on the residence could be claimed as an itemized deduction if you have expenses that were not covered by insurance. The articles below will be helpful as well.
- What if I have property that was lost or damaged?
- About Casualty Deduction for Federal Income Tax

Re: Can someone claim casualty loss when selling primary residence?

fganter — Sat, 01 Mar 2025 14:34:38 GMT

I thought so.

I just wanted to make sure because of the uniqueness around disasters.

Thanks, Diane.