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 ans 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.
See the IRS link below.
https://www.irs.gov/pub/irs-pdf/p547.pdf
