Form 4684 and Damaged house for hurricane Ian

[Justin202203]

Hi There,

Good morning.

My house was damaged during hurricane Ian, I have a few questions to ask how to report the loss on Form 4684.

1. The hurricane happened in Oct 2022, when should I report the loss? Because so far I dont have enough information to report it, can I report it in 2023 return?

2.Hurricane damaged my pool cage/screens, pool pavers, boat lift and cannopy(part of Dock), tiles on the roofs etc, how do I report the amount? I saw 4684 instruction and Publication 547, said need have FMV of the house before and after hurricane, I only have Jan 2022 house FMV from county property tax bill, they haven't included the hurricane damaged when they sent out the billing in Nov 2022.

3.If I received the county proerty tax bill shows house FMV  which included the hurricane damaged, should I split house value and Deck Value, Dock Value?

Thank you very much.

[PatriciaV]

Yes, if you aren't sure how much of your casualty or theft loss will be reimbursed, don't report the loss until the tax year when you become reasonably certain what will and what won't be reimbursed. (from IRS Instructions for Form 4684 When to Deduct a Loss).

Fair Market Value is generally determined by a competent appraisal. The appraiser's knowledge of sales of comparable property about the same time as the casualty or theft, knowledge of your property before and after the occurrence, and the methods of determining FMV are important elements in proving your loss.

Replacement cost or the cost of repairs isn't necessarily FMV, except under certain circumstances. Neither is your property tax assessment. Your best option is to obtain the assistance of a real estate appraiser in your area who is familiar with determining FMV for disaster-related properties.

[Justin202203]

Thank you very much.

[Justin202203]

@PatriciaV ，

Good morning. 

I am confused the IRS tax relief of Hurricane Ian here, https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-hurricane-ian-in-florida, so we can only deduct 10% AGI if used itemized duduction because of Ian it's not a "qualify loss"? If we use standard deduction then we can't deduct any losses?

I read some articles from tax accounting professionals, can you please read the IRS rax relief and below articles and let me know if my understand is correct or not?

https://www.cottrelltax.com/ian-casualtylosses

https://www.ficpa.org/publication/hurricanes-ian-and-nicole-casualty-losses

https://www.bpbcpa.com/tax-treatment-of-casualty-losses-and-casualty-gains-from-hurricanes-ian-fiona...

Thank you so much. Have a great day.

[RobertB4444]

I'm afraid your information is out dated.  Which is actually good news for you.

Hurricane Ian has been rated as a qualified disaster by the federal government with FEMA code DR-4673-FL.  You will be able to take your full disaster losses and add them to your standard deduction without having to subtract 10% of your AGI from the total.

As @TurboTaxVal says above be sure to finish settling with your insurance company BEFORE you enter this disaster on your tax return so that you know the full amount that you are not being reimbursed for.  If that means waiting until next year then so be it.

Here's the FEMA disaster declarations site.

@Justin202203 

[Justin202203]

@RobertB4444 

Thank you so much for your confirmation. That's really good news for me.

Have a great day.

[Justin202203]

@RobertB4444 @PatriciaV 

FEMA gave me $200 sanitary fee, should I deduct that from my full losses? And I am still waiting for other pending compensation from FEMA, if they approved it should I deduct that from my full loss too? This is not from insurance company, just FEMA.

Thank you very much.

[MarilynG1]

How much did it cost to have all damaged items repaired or replaced?   If the the repairs/replacement have been completed (for example, total cost of 10K), then 10K is the FMV Before Casualty.  The FMV After Casualty is $0.

You could report the Reimbursement amount received in 2022, but will need to Amend your 2022 return to correct your reimbursement/loss amounts if you receive more reimbursements in 2023.  Or, you could wait to report the Casualty Loss on your 2023 return. 

Here's detailed info on Tax Credits for Federal Disasters and FEMA Assistance. 

[Justin202203]

@MarilynG1 @RobertB4444 @PatriciaV 

Thank you all for your help.

Where should I put FEMA gave me $200 sanitary fee? Can I just deduct this $200 from my damaged total losses? Or I shoud put into somewhere else?

I already appealed to FEMA and I am getting the appraiser to estimate the FMV of the house before and after hurricane, after I received the FMV, if I still can't get FEMA's reply before 2022 tax return deadline, can I report all the damaged losses and FEMA 's Reimbursement in 2023 tax return? 

Thank you very much.

[RobertB4444]

Yes.  Add FEMA's reimbursement in the same as an insurance reimbursement.  So whatever you get will reduce the amount that you actually lost.  And all of this can wait til 2023s tax return if you still haven't settled with FEMA or you insurance carrier.

@Justin202203 

[Justin202203]

@RobertB4444 

Thank you very much.

[Justin202203]

@RobertB4444 @MarilynG1 @PatriciaV 

Hi All,

Thank you so much for your great help regarding this issue.

I totally understand that @RobertB4444  already replied my question regarding Hurricane Ian is a qualified disater or not, however these days I kept receiving some news from my neighbor said "Because Hurricane Ian has not been declared a "qualified disaster" by Congress, your tax deduction for casualty losses could be denied by the IRS and if you take the casualty loss you could be facing thousands in penalty fees etc.".

Could you please help to double check and confirm that IRS has declared Hurricane Ian is a qualified disater?

Can you please copy the IRS  link to me? Below is from Wink news said still not qualified disater.

https://winknews.com/2023/02/27/hurricane-tax-issues/

Agian, Thank you very much.

[DoninGA]

@Justin202203 This is the IRS website for Florida victims of Hurricane Ian - https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-hurricane-ian-in-florida

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either the year in which the event occurred, or the prior year. See Publication 547 for details.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684, Casualties and TheftsPDF and its instructions.PDF

Affected taxpayers claiming the disaster loss on their return should put the Disaster Designation, "FL Hurricane Ian" in bold letters at the top of the form. Be sure to include the FEMA disaster declaration number, DR-4673-FL, on any return. See Publication 547 for details.

[Justin202203]

@DoninGA 

So I can deduct total loss or just 10% AGI when used itemized duduction?

Thank you very much.

[DoninGA]

@Justin202203 You complete Section A of the Form 4684 per the instructions which include Line 17 that requires entry of 10% of your AGI.

Follow the TurboTax step-by-step interview for Form 4684.

Enter casualty loss in the Search box located in the upper right of the program screen.  Click on Jump to casualty loss