List the total basis of the property (that's what you paid for it with adjustments such as shipping costs or installation costs), or the decrease in fair market value (FMV), whichever is less. The decrease in fair market value is the difference between the FMV just before the loss and just after the loss. The value of something stolen or completely destroyed is, of course, zero.
Example: You have a tool shed that burned down. The basis of the tool shed is $11,000 because that's what you paid for it. The fair market value (FMV) of the tool shed was $9,000 just before it burned and the remaining wood was salvaged for $500 after the fire, so the decrease in fair market value is $8,500 ($9,000 FMV before casualty - $500 FMV after casualty = $8,500 decrease in FMV). You calculate your loss based on your decrease in fair market value at $8,500, since that's less than the basis of $11,000.
Note: For information on determining the basis or fair market value (FMV) of your personal property, refer to IRS Publication 584, Casualty, Disaster, and Theft Loss Workbook.
- Subtract all insurance reimbursement you have received or expect to receive when calculating your casualty or theft loss amounts (in your case, based on the information you have provided, this would be "0"). (Remember, TurboTax asks you for this information and performs the calculation for you.)
