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Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

 
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5 Replies
Carl
Level 15

Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

No you can't do that on your primary residence or 2nd home. What is your situation? Total loss? Are you rebuilding? Fixing it? Is insurance or any FEMA payouts involved here?

Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

Thanks Carl. Significant damage with insurance. So Insurance paid to repair property. However, the actual value of the property is significantly less (if I were to sell it today) due to the flood. I was thinking there might be a tax provision similar to the diminution of value argument utilized during vehicle accidents.
Carl
Level 15

Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

What you're wanting to do is not how you do it, and if you could do it, it *WOULD HURT YOU* big time in the future when you sell the property. Your cost basis in the property (what you paid for it when you bought it) has not changed, regardless of what it's value may be now.
But as for claiming losses, you can do that by working it through the Casualty and Thefts section as explained by TurboTax Irene in the answer box below. Unless you had significant damage, and depending on any insurance/fema payouts, it's very likely that you won't have enough of a "real" loss to claim that would make a difference on your tax liability anyway. But the fact is, you won't know until you work it through the program as instructed below.

Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

Thank you for the advice Carl!
IreneS
Intuit Alumni

Can I deduct the diminution in value of my house after it flooded? If so, how do I do so?

You may be able to deduct a casualty loss on your tax return if:

  1. Your loss was due to an accident, theft, or act of nature.
  2. You itemize deductions on Schedule A;
  3. You have not been reimbursed by insurance, federal or state programs.  (You can claim the amount of losses not reimbursed).

Keep in mind that the first $100 of a loss is not deductible and after that only the amount exceeding 10% of your AGI is deductible.  To enter a loss from theft or casualty please follow these steps:

  1. While in your return, click on the magnifying glass icon at the top right of your screen.  [See Screenshot #1.]
  2. Type casualty loss in the search box.  [Screenshot #2]
  3. Click on the Jump to casualty loss hyperlink.
  4. On the Casualties and Thefts screen, click on the Yes box.
  5. Continue through the interview, entering the requested information.


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