Last year (2024), continuous heavy rains pummeled our area and damaged my home's roof. I spent $25,000 to have the entire roof replaced. Unfortunately, our **bleep**ty insurance would not cover it, so I had to spend the money out of my own pocket.
My home was purchased in Los Angeles in 2002 for $268,000. I found out recently that the damage to my roof happened during a federally declared major disaster in Los Angeles County where my home is located. I have checked the FEMA site and obtained the code, DR-4769, for the disaster. Can I deduct the damage to my roof as a disaster deduction? If yes, I would like to know the following:
1. How do I calculate the Cost Basis for the deduction? It's hard to quantify how much I bought the roof for (just the roof) as it is a part of the total buying price of the home. So can I use the amount I spent to replace the roof, $25,000, as the Cost Basis?
2. How do I calculate the Fair Market Value of the roof before the loss? Again, it's hard to quantify so can I use the amount I spent to replace the roof, $25,000, for this?
3. I guess the Fair Market Value of the roof after the loss is $0 since it was gone, trashed, and replaced with a new roof, is that correct?
Now, after claiming the disaster deduction, can I, in addition, also claim a "Home Repair/Maintenance Expense" for the $25,000 I spent to replace the roof? Or is it an "either or" --- I can claim only either the disaster deduction or the Home Repair/Maintenance Expense but not both? If it is an "either or", which do you think is more advantageous to claim?
Thanks in advance for your much appreciated help! 👍
