Claiming actual repair costs for federal disaster?

[user17754280508]

My county was declared a federal disaster (in 2024) due to which I had to replace roof on my house.  I am amending my turbotax return and filling in form 4684, only to find that Turbotax is actually not using the actual repair cost.  After my review,  loss should not be limited to 10% AGI limitation.  This actual loss is allowed in Form 4684 Section A.  Turbotax is reducing my casualty loss.  (FMV before/after seems to be messing this up).

Can anyone please suggest how to correctly enter this information?

[ThomasM125]

You enter the loss in the Deductions and Credits section, then Other Deductions and Credits, then Casualties and Thefts. On the Event Details screen, enter a description for the event and indicate it is for personal property. On the next two screens choose the appropriate federally declared disaster and enter the FEMA number. On the screen that says Summary of Lost/Damaged Property or asset, enter the information requested to include the property cost and fair market value before and after the casualty. 

To be immune from the 10% of adjusted gross income deduction, the loss would have to be associated with a "qualified disaster", which is described in this excerpt from IRS publication 547.

[user17754280508]

Hi ThomasM125 - I have done that a couple of times - totboxtax premier 2024 does not give me the option of adding actual cost of repair, instead forces the calculation to 10% of AGI which is incorrect. I can manually override the values, but then I have to paper file my return - not an ideal situation. Is there anything else you can suggest please? 

it is a FEMA qualified DR event!! 

Thank you so much for helping!!

[AmyC]

You should not be in the 10% spot and you do not claim the repair costs as a standalone. The repair costs may be a part of or equal to the change in FMV.

For example: 

• house worth $200k
• casualty
• repairs to restore $23k
• house value after storm maybe $177k
• I find people lose trees, fences, etc and forget to claim all of their actual damage and loss so busy trying to make the house livable again.

There is a lot to getting this right so I want to point you to another post of mine which has even more links and help.

[user17754280508]

Hi AmyC - thanks for the response. Here is my dilemma: roof loss. 
On personal property information - I entered:

cost basis of roof acquired in 2018: 35,700.

insurance reimbursement: 31,644

Next page takes me to FMV before loss and after loss.

FMV before loss: 550000.

FMV after loss: 504,235

In form 4684 p1 worksheet line12 should have a loss of 15,121 but instead shows about 5K. 

That’s the issue with how turbotax is calculating it. I have read up on IRC 165 where I should be able to claim actual loss not limiting it to 10% AGI.

Thanks for your help in advance!

[Vanessa A]

Is your loss a Qualified Disaster Loss or a Federally Declared Disaster Loss?  The QUALIFIED disaster loss is NOT subject to the 10% of AGI, but it is subject the a $500 reduction.

If you have a Disaster Loss or Federally Declared Disaster Loss, this IS subject to the 10% limitation and $100 reduction which is what you are seeing.  

if you had a Qualified Disaster Loss (listed as a Major Federally declared disaster in TurboTax and by FEMA), then you would qualify for the $500 reduction instead of the 10% of AGI reduction. 

Therefore, if you DO have a MAJOR Federally declared disaster claim, then you will need to go back and edit your answers in TurboTax and claim MAJOR instead of just federally declared disaster.  This will change the calculations and remove the 10%.  

Publication 547 Casualties, Disasters, and Thefts