How to establish values for casualty and theft deduction?

Forum|Forum|1 year ago
February 2, 2025
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We had two storms that caused damage to our property in summer 2024. They were separate incidents. One led to a bad basement flood and the other to another basement flood and part of our fence and retaining wall washing out. What a mess. Both of these ended up being Major Disaster Declarations from FEMA.

I'm trying to use the workbook from publication 584 to find numbers to help claim the casualty and thefts deduction. From what I can understand I have to use the smaller of a) cost or other basis or b) fair market before minus fair market after. But, what I'm wondering is how I establish "cost or other basis" or "fair market" on a basement or a portion of a retaining wall and yard, when these two things have been at our house since we bought it 14 years ago. Is there a calculator or formula out there that I can use? No insurance claim. Hope this all makes sense. Thanks in advance.

AmyC

Employee

Yes. Cost or other basis may be good for plants you planted, a fence you added, those things. Part of the house and things you bought with the house will require a look at fair market value.

If the day before the disaster, you had put your house on the market, determine that value.

If you put the house on the market the day after the disaster, determine that value.

Now you have FMV before and after disaster for your house damage.

You can use FMV with all of your items. What was the value of the fence before the disaster, and probably zero after.

The new retroactive law allows each disaster loss minus $500 and use it with your standard deduction or it can be added to your itemized deductions. The forms are being updated. Please check forms availability here.

Reference:

Topic no. 515, Casualty, disaster, and theft losses

About Form 4684, Casualties and Thefts

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