If destroyed home has replacement cost of 300k and home owner insurence pays 250K, how do I report the 50k loss?

[Hal_Al · Accepted solution]

You may have a casualty loss. But the $300K replacement cost is not relevant. So, you do not necessarily have a $50K loss. 

Your casualty loss is the difference between what the house was worth (FMV-fair market value) before the fire and what the insurance company paid you.

You use you best efforts to determine FMV: real estate tax assessment, realtor's opinion, internet sites or ideally a professional appraisal.

To claim a tax deductible casualty loss you must not only subtract what the  insurance company paid, you can only deduct your losses that exceed 10% of your AGI+$100. In addition, it is an itemized deduction. If you usually take the standard deduction, you'll have to now find additional itemized deductions to exceed the standard deduction. A taxpayer seldom has a net tax deductible casualty loss,  where insurance is involved.

In TurboTax, enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

 -I’ll choose what I work on button

  -Scroll down to:

   --Other deductions & Credits

     ---Casualty & theft

Or type- casualty loss -in the search box

For more info, see:

http://www.irs.gov/pub/irs-pdf/i4684.pdf

[SweetieJean]

Please keep your related questions in one thread.  Replacement cost is not relevant.

https://www.irs.gov/taxtopics/tc515.html

[SweetieJean]

and the figures you cited here are different than in your other post.

[SweetieJean]

"Replacement cost.   The cost of replacing stolen or destroyed property isn't part of a casualty or theft loss."
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p547/ar02.html">https://www.irs.gov/publications/p547/ar02.html</a>