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CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3820
Experience:  over 40 years experience in tax matters
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I own a small farm and file a 1040 and a schedule F for my

Customer Question

I own a small farm and file a 1040 and a schedule F for my farm. The only way to egress and ingress my personal residence and farm is over a bridge that crosses a stream on my property. During a winter storm, which was declaired a federal disaster by the President, the bridge was destroyed and had to be replaced. The insurance company would not pay for the replacement of the bridge. Can I deduct a percentage of the replacement cost as a business casualty loss and the remainder as a casualty loss on schedule A?
Submitted: 6 years ago.
Category: Tax
Expert:  CGCPA replied 6 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

Although you can certainly do as you are considering, I would argue towards claiming the entire amount in the Schedule F. After all, you cannot access the farm over a partial bridge.

Customer: replied 6 years ago.
First of all does it qualify as a loss? From your answer I assume it does. Next, I only want to take a percentage, say 50% on the business and the other 50% on scheduale A ( casualty loss). Do I have to take any depreciation into account? I have never depreciated the bridge.
Expert:  CGCPA replied 6 years ago.
Yes, it does qualify as a loss if it needs replacement due to storm damage. You need not claim depreciation and are completely able to do the 50/50 split you wish.
Customer: replied 6 years ago.
Can you provide me with the federal statute and/or regulation that cites this information?
Customer: replied 6 years ago.
Should I use the replacement cost or the value when originally constructed? Also the storm that was declared a disaster by the President started in late December 2009 and culminated in January 2010. Can I put this ccasualty loss on my 2010 tax return?