Figuring
a Loss To determine your deduction for a casualty or theft loss, you must first
figure your loss.
Amount of loss.
Figure
the amount of your loss using the following steps.
1.
Determine your adjusted basis in the property before the casualty or
theft. In your case how much you paid for
the trees and if you paid someone to plant them.
2.
Determine the decrease in fair market value (FMV) of the property as a result
of the casualty or theft. Their FMV would
be zero and they no longer exist.
3.
From the smaller of the amounts you determined in (1) and (2), subtract any
insurance or other reimbursement you received or expect to receive.
Clean-up
Cost of cleaning up or making repairs. The
cost of repairing damaged property isn't part of a casualty loss. Neither is
the cost of cleaning up after a casualty. But you can use the cost of cleaning
up or of making repairs after a casualty as a measure of the decrease in FMV if
you meet all the following conditions. The repairs are actually made. The
repairs are necessary to bring the property back to its condition before the
casualty. The amount spent for repairs isn't excessive. The repairs take care
of the damage only. The value of the property after the repairs is not, due to
the repairs, more than the value of the property before the casualty.
Landscaping. The cost of restoring
landscaping to its original condition after a casualty may indicate the
decrease in FMV. You may be able to measure your loss by what you spend on the
following. Removing destroyed or damaged trees and shrubs, minus any salvage
you receive. Pruning and other measures taken to preserve damaged trees and
shrubs. Replanting necessary to restore the property to its approximate value
before the casualty.
In TurboTax (for
personal losses):
Go to Federal Taxes
Deductions and Credits
Scroll down to Other
Deductions and Credits
