Casualty Loss

[POCAHONTAS]

client's car was caught in an electrical fire, the insurance report shows a different owner but they say they made all the payments. So can they still claim the car on their return even though it is not in their name??
thanks

[POCAHONTAS]

ok so they purchased the car from the owner in 2006, but never changed the owner on the insurance, so since the have the title to the car they can take the loss correct?

[erchess]

Personal View Here

I think there's something fishy going on and I feel certain that the situation as you present it would not survive an audit. So before I prepared the return I would make them get something in writing from the insurance company acknowledging that on the date of the accident in report thus and such they were the owners of the car.

[POCAHONTAS]

they brought me a copy of the title report which shows the date when they obtained the title should that be sufficient or do I still need to get the letter from them??
thanks

[erchess]

I'm uncomfortable

with the wrong owner on the accident report. But if the accident report gives a VIN matching the VIN on the title report I guess you are ok unless someone else knows otherwise.

[taxmom34]

not sure about your state

but in mass when you buy a car, you need to register it and get plates and in order to do that you need to show you have compulsory insurance.

[Lion]

Insurance

The insurance would probably not pay out if their client is no longer the car owner. Put them on extension until they can produce a matched set of paperwork.

[POCAHONTAS]

thanks guys but after taking a close look at the title report and talking to the client, this is what I found

the title report is under the client and her daughter's name,
the insurance was only in her daughter's name but the last name is different because the daughter got married.
client wants to take the casualty loss because the daughter is not itemizing so how would this work??

thanks for all your help

[S T]

Title Report

Are you referring to DMV registration?

Could be your client,( parent's ) had to co-sign for the loan, so therefore on the DMV title,
and the Insurance Company only placed the Insurance in the daughter's name as she was primary on the loan. However, I think the parent should have been listed also as an additional named insured.

Not sure how that is going to work, for your client.

Is net dollar amount even going to meet the Casualty loss Requirements on the Tax Return? As I am sure you know, if personal casualty you have to first reduce Cost by the amount of the insurance reimbursement, then another $ 500 and then another 10% of gross income. Whatever is left over will be the casualty loss deduction.

You didn't provide any of the actual figures of the cost, fmv, reimbursement, etc.

Sandy

[Burke]

thanks guys but after taking a close look at the title report and talking to the client, this is what I found
the title report is under the client and her daughter's name,
the insurance was only in her daughter's name but the last name is different because the daughter got married.
client wants to take the casualty loss because the daughter is not itemizing so how would this work??
thanks for all your help

I was with you until you mentioned "because daughter is not itemizing..."
Sounds like it is the daughter's car, but loss won't help her so Mom wants to take to get more refund. Unh, unh. Why would the title have joint names if client purchased it from daughter in 2006? Can she prove she bought it? The title usually lists the purchase price. Notifying the insurance company is one of the first things you do when you change ownership. Just had to tell a daughter she couldn't take the PP tax deduction on her Dad's car because she didn't pay it. "BUT IT HAS HER NAME ON THE TITLE in addition to his and he didn't itemize." So? Many people title property (especially cars) in joint names for convenience.