Non business casualty loss

[JenMO]

Clients had a fire, completely destroyed home and everything in it. (2010) Insurance paid (2011) out all that was insured for, but client is complaining they didn't get paid for some personal family heirlooms and treasures that burned up. Insurance co told them to take it to their tax preparer and take a casulty loss over 3 years. What would the amount to take on family heirlooms, FMV? or actual cost? Do I need a itemized list of each item and the value? These heirlooms can't be replaced, of course, but does that make them deductible? Any help would be appreciated.

[dan doshan]

I hate casualty losses. But as far as I know isn't the loss limited to the lesser of your cost or fair market value. If a family heirloom, and they were handed down who knows what the original cost was. Great grandma may have paid 40 dollars for something many years later that may have a value of 4000 dollars. I guess they should have insured things accordingly.

On the other hand wouldn't this be extremely difficult to figure out because wouldn't one have to deal with the whole casualty loss overall and not just pick out a few items that apparently were not paid for.

Just for fun fill out the casualty loss form and see where it leads as far as the heirlooms go. I suspect you would end up with little or no loss.

[S T]

Also, once you arrive at the Value of the Items, the loss you arrive at is then limited further by $ 100, and then another 10% of AGI

Arriving at Basis of Property their is Topic 703 and Pub 547 here is one of the links to IRS Topic 515 http://www.irs.gov/taxtopics/tc515.html

Sandy

[taxea]

doesn't the form say "the lesser of basis or FMV". Family heirlooms have a huge sentimental value which you can't put a price on. If the item doesn't have an appraisal I think you would be stuck with taking whatever the instructions allow. With that said, the insurance company will research the FMV of the item and that is what they pay without an existing appraisal.