Appraisals and Other Evidence
A professional appraisal is often the best evidence you can
obtain of the value of property before and after a casualty. Ideally,
the appraiser would be someone who was at least passingly familiar
with your property before and after the casualty, who has adequate
knowledge of sales of comparable property in the area, who is familiar
with conditions in the area, and who uses conventionally accepted
appraisal methods.
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Save Money The cost of obtaining an appraisal
is not itself part of your casualty loss, but it can be deducted as
a miscellaneous itemized deduction on
Schedule A of your individual income tax return (Form 1040). |
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While professional appraisals are nice to have, they are
not always required, especially for inexpensive items. An insurance
adjuster's appraisal may do just as well. If you sell the property
after the casualty, the sales price will be evidence of its fair market
value (FMV).
For cars, you can often rely on "blue books"
or similar sources that provide retail values for cars by age, make,
model, condition, mileage, etc.
For property that has been
damaged, you can use the cost of cleaning it up or repairing it to
bring it back to its condition before the casualty as a measure of
the difference in fair market value before and after the casualty,
so long as the repairs do not actually increase the property's value
above its pre-casualty value. Finally, if you have photographs (before
and/or after), videotapes, an insurance inventory, any receipts or
other documentation, they may all be useful in establishing the property's
value.
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Work Smart You may find the IRS's free Publication
584, Casualty, Disaster and Theft Loss Workbook (Personal Use Property), helpful
if your home and personal belongings have been largely destroyed by
a disaster. It goes through the house room by room and prompts your
memory with lists of items commonly found in a typical home, which
can also be useful in filing your insurance claim. IRS Publication
584-B, Business Casualty, Disaster, and Theft Loss Workbook,
provides similar worksheets for business property. You can download
a copy from the IRS website or
order one by calling 1-800-TAX-FORM. |
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