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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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if the house was affected by hurricane Sandy what can be written

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if the house was affected by hurricane Sandy what can be written off? just the cost or repairs as casualty loss? or the the amount by how much fare market value was reduced? How is FMV determined?

Customer:

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Customer:

A personal casualty loss is determined by the smaller of either your cost basis in the house or the decline in fair market value

Customer:

You cannot use repairs alone to determine the casualty loss

Customer:

Fair market value is determined by what you would be able to sell the house for after the disaster

Customer:

When you write off the casualty loss, you will need to reduce the basis in your home by the amount of loss you claimed

Customer:

Accounting for these losses requires some estimates, and the IRS realizes that

Customer:

So, work with your tax professional to make a good faith estimate of the FMV of the property immediately after the disaster

Customer:

Also, you must reduce your casualty loss by any insurance proceeds you received.

Customer:

So, if your insurance company reimbursed you more than the decline in Fair Market Value or the cost basis (whichever is less) then you would not have a deductible casualty loss

Customer:

Here is a good IRS article about this topic: CLICK HERE

Customer:

Do you have any further questions?

Customer:

Is there anything else you need assistance with?

Customer:

If you do not require further assistance, please rate my response as "excellent" so that I may receive credit for assisting you today. Thanks again for using JustAnswer.com

JACUSTOMER-zh4e8qir- :

"what you would be able to sell the house for after the disaster" how is it determined?

JACUSTOMER-zh4e8qir- :

untill you actually sell it is a speculation

Customer:

Yes, it is an estimate

Customer:

The IRS realizes that this is an estimate, and that it is subjective.

Customer:

You just simply make the best estimate you can.

Customer:

There's no defined metric

JACUSTOMER-zh4e8qir- :

got it , thanks

Customer:

You're welcome

Customer:

Is there anything else you need assistance with?

JACUSTOMER-zh4e8qir- :

no, thank you

Megan C and other Tax Specialists are ready to help you

Thanks, XXXXX XXXXX the positive rating, and generous bonus. Please come back and visitCustomerany time you need a question answered. I can answer tax, finance, and social security questions. It was a pleasure working with you today.