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WiseOwl58
WiseOwl58, Lawyer
Category: Real Estate Law
Satisfied Customers: 3620
Experience:  Experienced real estate lawyer and real estate broker.
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Casualty loss on commercial rental property. fire occurred

Customer Question

casualty loss on commercial rental property. fire occurred in April 2014 can I deduct loss in 2015. Also does adjusted basis calculation of building include value of land.
JA: Because laws vary from state to state, could you tell me what state is this in?
Customer: California
JA: Have you talked to a lawyer yet?
Customer: no
JA: Anything else you think the lawyer should know?
Customer: adjusted basis of building is cost less accumulated depreciation. of $2026630. est. insurance reimbursement for building is $ 1,448,644 fair market value of property before fire estimated at 5.5 million and after is 2.5
Submitted: 3 months ago.
Category: Real Estate Law
Expert:  WiseOwl58 replied 3 months ago.

Under California and federal tax law, you can deduct as a casualty loss the dimunition in value of the building as a result of the fire. The loss can be deducted for the tax year in which you discovered the loss occurred. If you realized the loss in 2015, then you can take it for that tax year. If 2014, it should be taken in 2014, but you can always file an amended return and use the tax loss carryforward.

Generally, the land value would not be reduced as a result of the fire, so there would be no deduction for the land.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

Expert:  WiseOwl58 replied 3 months ago.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

Expert:  WiseOwl58 replied 3 months ago.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

Expert:  WiseOwl58 replied 3 months ago.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

Expert:  WiseOwl58 replied 3 months ago.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

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