Form 4684 and Damaged house for hurricane Ian

[Justin202203]

@AmyC 

Hi Amy,

Thank you very much for your help.

I have two questions regarding to report loss for Hurricane Ian.

1)IRS required"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."

I will prepare and file with turbotax software windows version, and I already entered"FL Hurricane Ian" and"DR-4673-FL" in the software as required, when I reviewed the forms, I didn't see "FL Hurricane Ian" in the bold letters at the top of the form 4684, it's in the middle of the form D description of casulty or theft event,

what should I do?

2) I want to select "Federally declared disaster method—contractor safe harbor."  this method to report the loss, because I dont have much more time to get appraiser for FMV, and I want to combine all the damages to one item as a whole of my house to report it, I have original buying price for cost basis, and I have contracts for the damaged to repair, but when I enter in Turbotax software, it still need FMV before hurricane, where can I get it? Can I use property tax department report?

Thanks again. Have a great day.

[JarvisPLLC]

UPDATE

Hurricane Ian is still not a "Qualified Loss Disaster" for purposes of avoiding the 10% AGI limitation.

https://www.rickscott.senate.gov/2023/3/sens-[product key removed]-rubio-introduce-bill-to-provide-t...

I am still amazed that I am still seeing incorrect information posted on this message board from "Tax Experts" with respect to this issue.  If anyone believes that I am incorrect, then why are there Senators and Representatives of the Federal government trying to pass tax law to have Hurricane Ian be classified as a "Qualified Loss Disaster". 

[Justin202203]

Hi,

Good afternoon.

Regarding above two questions I just asked, I would like to add more finding for question 2).

I am reading "Instructions for Form 4684 (2022)" from IRS, It said"Safe harbor reporting requirements for Form 4684.If you use one of the safe harbor methods provided in Revenue Procedure 2018-08, you must attach a statement to Form 4684 stating that you used Revenue Procedure 2018-08 to determine the amount of your casualty loss. Include the specific safe harbor method used. When completing Form 4684, do not enter an amount on line 5 or line 6 for each property. Instead, enter the decrease in the FMV determined in the relevant safe harbor method on line 7."

It brought me two more questions:

1) This is no where to attach a statement to from 4684 in Turbotax Software.

2) Turbotax software still asked me to enter FMV before loss and FMV after loss, which it shouldn't ask, just provide me a place to enter $decrease in the FMV. 

Please kindly help this.

Thank you very much.

https://www.irs.gov/instructions/i4684#en_US_2022_publink12998zd0e986

[Justin202203]

Thank you very much.

@JarvisPLLC 

[Justin202203]

Dear all experts,

Can you please help to repy my above questions? I copy here:

Regarding above two questions I just asked, I would like to add more finding for question 2).

I am reading "Instructions for Form 4684 (2022)" from IRS, It said"Safe harbor reporting requirements for Form 4684.If you use one of the safe harbor methods provided in Revenue Procedure 2018-08, you must attach a statement to Form 4684 stating that you used Revenue Procedure 2018-08 to determine the amount of your casualty loss. Include the specific safe harbor method used. When completing Form 4684, do not enter an amount on line 5 or line 6 for each property. Instead, enter the decrease in the FMV determined in the relevant safe harbor method on line 7."

It brought me two more questions:

1) This is no where to attach a statement to from 4684 in Turbotax Software.

2) Turbotax software still asked me to enter FMV before loss and FMV after loss, which it shouldn't ask, just provide me a place to enter $decrease in the FMV. 

Please kindly help this.

Thank you very much.

https://www.irs.gov/instructions/i4684#en_US_2022_publink12998zd0e986

@JarvisPLLC @AmyC @DaveF1006 @DoninGA 

[DaveF1006]

There is no way to attach a statement to your return to submit electronically. You will need to print and mail your return, including the statement attached to the return.

As far as denoting the decrease in value, this can be accomplished by entering the FMV of the property before the disaster and after. The difference represents the decrease in value. Most disasters will result in the total loss so if the property was worth $5000 before and totally worthless afterwards, you would record a 0 for the FMV after loss, representing a $5000 loss/decrease in value.  If $5000 before but $1000 afterwards, a $4000 loss/decrease in value. 

Let me know if this answers your questions.

@Justin202203 

[Justin202203]

I can understand that your meaning regarding FMV decreased, however Turbotax Technology should fix this issue, it should pop out a selection, which method to use for the dollar amount of the loss, and then insert a statement page if needed. Can you please give feedback to Turbotax Technology team of that?

IRS requried"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", so Turbotax can't do that either, right? need I print and write down too?

Thank you very much.

Have a great day.

@DaveF1006 

[DaveF1006]

It is identified in Form 4684 at the top of the form in the opening box under Information about this Casualty  Line A in bold letters.  This satisfies IRS requirements so it isn't necessary for you to do anything additional to this.

@Justin202203 

[Jane518]

I am trying to use turbo tax form 4684 to claim a loss from hurricane Ian. After I enter the info for the form it is applied to schedule A. You then have to add your standard deduction amount on schedule A. But, I cannot add the standard deduction amount to other itemized deductions line 16. There is no question that I can answer to get the standard deduction amount added. How do you do this ??? 

[DoninGA]

---

@JarvisPLLC wrote:

UPDATE

Hurricane Ian is still not a "Qualified Loss Disaster" for purposes of avoiding the 10% AGI limitation.

https://www.rickscott.senate.gov/2023/3/sens-[product key removed]-rubio-introduce-bill-to-provide-t...

I am still amazed that I am still seeing incorrect information posted on this message board from "Tax Experts" with respect to this issue.  If anyone believes that I am incorrect, then why are there Senators and Representatives of the Federal government trying to pass tax law to have Hurricane Ian be classified as a "Qualified Loss Disaster". 

---

What you posted is the Senator's bill that would provide Tax Relief for Floridians affected by Hurricane Ian.  It has absolutely nothing to do with the classification of Hurricane Ian as a federally declared disaster, which it has been by FEMA with designator DR-4673-FL.  FEMA website - https://www.fema.gov/disaster/4673

The legislation has not been enacted as of this date.  If enacted it would -

The Hurricane Tax Relief Act would make Hurricanes Ian, Nicole and Fiona qualified disasters for purposes of enhanced disaster casualty loss tax relief. This bill modifies the deduction for personal casualty losses in the hurricane disaster areas, waiving the requirements for impacted taxpayers to itemize deductions and to have losses that exceed 10% of adjusted gross income.

https://www.rickscott.senate.gov/2023/3/sens-rick-scott-marco-rubio-introduce-bill-to-provide-tax-re...

Until legislation is enacted the current tax code Must be used, not speculation.

[JarvisPLLC]

DoninGA

I suggest you read my posts again more carefully. I did not suggest to anybody that the Hurricane is not already designated as a federal disaster area. This outstanding issue is the 10% threshold and the designation "Qualified Disaster Loss". 

Your name sounded familiar. I went back and reviewed your postings and replied to me 3 weeks ago on my commentary on this issue. I will be silent on your previous postings to my reply. I am here to help. Not argue clear facts. You take care.

Kenneth Jarvis

[Justin202203]

Hi,

I am not an expert,  I will try to answer your question. Here I copy Dave's answer:

"Here is how to report:

1. Go to federal>deductions and credits
2. Other deductions and credits>casualties and thefts
3. Give Hurricane Ian as a description, date, and indicate this is personal property
4. Next you will check the box indicating this is a Federally declared major qualified disaster loss
5. Next will ask for a FEMA code this is DR-4673
6. Next will ask for property information such as address, etc. This includes cost basis, meaning how much the property cost total and then your insurance reimbursement. 
7. When it asks for FMV before loss, you may estimate that total.  After loss it is zero since the insurance company has reimbursed for total loss. 
8. You can either report this in 2022, or amend your 2021 return and report it there.

Now, once all of this has been reported and if you did not have any other itemized deductions, your standard deduction will increase by the amount of your qualified loss, This will show up in line 16 on Schedule A and also on  line 12 on the 1040. There is also a form in your return calle St Ded with QDL that summarizes this deduction."

Hope this help. Thank you very much. @Jane518 @DaveF1006 

[SilverknightFL]

Filed for an extension to see if Ian gets "qualified" status. Maybe Congress can do something in six months with bills in both chambers. Obviously DeSantis is too busy with his book tour and TV interviews before he announces a run for the presidency to help shame Congress into doing this.

Politics aside and from a marketing standpoint, if the Governor does run for President, the Democrats will latch onto this issue like a dog to a steak, making Rick Scott's gubernatorial commercials look like a PBS sponsorship saying that DeSantis will only fight for himself when issues aren't on the front page. And they would be right. 

[SHIRLEY 75]

WHERE CAN I GET A COPY OF THIS FORM?

[SilverknightFL]

The casualty loss form from the IRS website.