Vigo wrote:

- quote -

No. The difference in fair market value often has no
relationship to the cost of the repair when the amount is
non-trivial (over $500 e.g.). Now, it may be a custom in
your area that when a property sells, its value is reduced
by any negotiated estimated costs of repair, but there are
some repairs and improvements that affect FMV at a greater
than 1:1 ratio than their costs.

- quote -

Yes, but as that was a federal disaster area, consider
claiming your casualty loss in 2004. - IRC section
165(i)(1) special election.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Vigo wrote:

- quote -

Your calculation makes sense, but I will let the experts
decide that. I have the same situation, albeit at a
considerably lesser amount. Don't forget to include the
estimated cost of perishable food spoiled by power outages.
I would welcome expert opinion on how to value and report
that.

Yes, print the name(s) of your hurricane(s) at the top of
Form 1040. Use red ink. IRS will determine eligibility from
the address on the return.

See IRS.gov for more information.

As an aside, those residing outside of Florida, for
instance, might wonder why a loss of $6750 would not qualify
for some insurance reimbursement. Well, all of the major
insurance companies have stopped writing policies here, and
we are "fortunate" to be covered by the state supported
"Insurer of Last Resort". The policy carries a deductible
of 3-4% of the home's insured value. The premiums -- already
at an obscene level -- are about to increase by an
additional 30-40%. But, all things considered, I plan to
stay.

Bill

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

My home suffered damages to the roof and to the screened
patio in 2 of the hurricanes last year. Both losses were
less than my deductible so I did not file a claim. The
repairs amounted to $6750. I just want to be sure I'm
calculating the deduction correctly.

I calculate the cost basis of my residence first (purchase
price + improvements) -- let's say that comes to $325,000.
Then I need to know the FMV of the house before the damage
and the FMV after the damage. Here's where I'm not clear. Is
the difference between those two figures going to be the
cost of the repairs? If FMV before is $600,000, then FMV
after is $593,250, right? And since I don't have to be
limited by the 10% or $100 rule, my casualty loss is $6750,
is that right?

Also, someone told me that we have to write "KATRINA" or
"WILMA" or "RITA" at the top of the 1040 and Schedule A so
the IRS knows that we are in the disaster area - is that
right?

Thanks!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >