Re: Is this a valid casualty loss?

#4 01-21-2004, 12:11 PM

Pistolesi wrote:

- quote -

> Take this scenario one step further ... here's aprx what
> happened to me last year [I'm fully covered with $100
> deductible]:
> [1] Car was totalled (rear ender).
> [2] Existing note aprx $15,500.
> [3] FMV $9,800.
> [4] Replacement cost $32,000.
> [5] I'm out the cash to pay the balance of the loan ($15,500 - $9,800).
> Further, I now have additional expenses of higher priced
> vehicle, loss of my [installed] executive phone, and higher
> payment for longer period of time. {It was a nice car
> [pouting].}
> How do I calculate my deductible loss?

Incomplete information: INSURANCE.
Many areas REQUIRE auto insurance.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#3 01-21-2004, 11:52 AM

"Pistolesi" <pistolesi[at]nospam.yahoo.com> wrote:

- quote -

> Take this scenario one step further ... here's aprx what
> happened to me last year [I'm fully covered with $100
> deductible]:
> [1] Car was totalled (rear ender).
> [2] Existing note aprx $15,500.
> [3] FMV $9,800.
> [4] Replacement cost $32,000.
> [5] I'm out the cash to pay the balance of the loan ($15,500 - $9,800).
> Further, I now have additional expenses of higher priced
> vehicle, loss of my [installed] executive phone, and higher
> payment for longer period of time. {It was a nice car
> [pouting].}
> How do I calculate my deductible loss?

Assuming that the insurance covered $9,700 ($100 deductible)
of the $9800 FMV, you have no significant loss to deduct. In
your list above, items (2), (4) and (5) are totally
irrelevant to the calculation of "deductible loss". The
gross loss starts with the difference between the FMV
immediately BEFORE the accident ($9,800) and the FMV AFTER
the accident ($0). That nets to $9,800. Then subtract any
insurance reinbursement ($9,700) to get a "net loss" of
$100. Subtract $100 (because that is the law) and you have
NO deductible loss to claim. The fact that your note is
$15,500 and the car FMV is only $9,800 is a consequence of
taking a long repayment period (or high interest rate) on a
vehicle that depreciates faster than you are paying if off.
Not the IRS's fault that you are upside down on your loan.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#2 01-20-2004, 08:26 AM

If you are totally covered by insurance, you have no
casualty loss. (The $100 isn't going to get anywhere.).
Replacement costs never count.

Nan, EA in LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#1 01-20-2004, 07:28 AM

Pistolesi wrote:

- quote -

> Take this scenario one step further ... here's aprx what
> happened to me last year [I'm fully covered with $100
> deductible]:
> [1] Car was totalled (rear ender).
> [2] Existing note aprx $15,500.
> [3] FMV $9,800.
> [4] Replacement cost $32,000.
> [5] I'm out the cash to pay the balance of the loan ($15,500 - $9,800).

If the insurance company's stated FMV is accurate, your
loss is the $100 deductible. Sorry.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

01-20-2004, 07:09 AM

"Pistolesi" <pistolesi[at]nospam.yahoo.com> wrote:

- quote -

> Take this scenario one step further ... here's aprx what
> happened to me last year [I'm fully covered with $100
> deductible]:
> [1] Car was totalled (rear ender).
> [2] Existing note aprx $15,500.
> [3] FMV $9,800.
> [4] Replacement cost $32,000.
> [5] I'm out the cash to pay the balance of the loan ($15,500 -
> $9,800).

Maybe I misunderstand, but I have a little problem with 3
and 4. How can the fair market value be $9800 and
replacement cost be more than three times the amount? They
should be the same number - at least that's what the
insurance companies say.

Or do you mean that you replaced your $9800 car with one
that cost you $32000?

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#-1 01-16-2004, 06:20 AM

Take this scenario one step further ... here's aprx what
happened to me last year [I'm fully covered with $100
deductible]:

[1] Car was totalled (rear ender).
[2] Existing note aprx $15,500.
[3] FMV $9,800.
[4] Replacement cost $32,000.
[5] I'm out the cash to pay the balance of the loan ($15,500 - $9,800).

Further, I now have additional expenses of higher priced
vehicle, loss of my [installed] executive phone, and higher
payment for longer period of time. {It was a nice car
[pouting].}

How do I calculate my deductible loss?

Sandy

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Similar Threads
Thread	Forum	Replies	Last Post
Money/MSN can't find a valid ticker symbol Warren Sisson: I hold some Viacom Inc. class B shares - symbol VIAB. When getting quotes or updating prices, MSN says The symbol is invalid. If I get quotes...	Microsoft Money	2	08-14-2004 04:29 PM
Unable to use a valid stock symbol : I put in a stock and later deleted it. Now I go back and try to reinput same stock with the same symbol, (FASMX), and it keeps stating that that...	Microsoft Money	1	11-26-2003 02:10 AM
Do I have a casualty loss? Cheryl: Do these facts indicate a casualty loss AND in what Year should it be reported - 2002 when the loss happened, or 2003 when I received the funds and...	Taxes	3	11-09-2003 06:21 AM

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode