Caualty Loss Form 4684

[Mike Mac]

I just had a client call and told me a fire destroyed most of their home. The home itself can be listed as a single line item on the 4684. But what about the all the personal property items?? In reading the instructions for Form 4684 and Publication 547 it appears that EACH ITEM must be listed indvidually. So each TV, night stand, stereo, bed, chair, sofa, dress, pants, etc would have to be listed if it qualifys for a loss??? I've used a 4684 before but only for a single item loss.

Have any of you ever lumped attempted to lump some of the items together (ie. bedroom furniture, living room furniture, husband's clothes, children's clothes, etc) with any success with the IRS??

Thanks for any info.

[George Boutwell]

Your client had no insurance?

Well, at least for IRS they won't have to do any more work than they would done for an insurance claim.

[Jiggers]

House lost in fire

I had a client in 2001 that lost his house in a fire. The house was covered at 100% replacement value.

But the contents were covered by a lower amount. Client did a very detailed spreadsheet showing cost (Estimated), FMV at date of fire, and insurance received, by item.

I just did one form for the contents and attached a statement saying that detailed information was available upon request.

Never heard from the IRS.

[Mike Mac]

Fire Loss

Thanks for sharing your experience with it Jiggers. I think that I'll advise them to go that same spreadsheet route (but add one more column for the FMV after the fire, likely zero).

George, yes they did have insurance, they thought they had replacement value insurance, but they did not. The paper-work involved with a Casualty Loss working with IRS likely is far more time consuming than with their insurance company. Early next week the insurance company is sending in a "contents adjustor" who will go through their home to view its contents and come up with some type of value. It does not sound like my client will have to list every single item, the date purchased, the adj basis, the fmv before the fire, the fmv after the fire, and the amount their insurance company paid them for each individual item they owned that was damaged in the fire.

We'll have to see what the final numbers are from the insurance company next week to determine if it is worth the effort. In addition to surpassing the 10% casualty hurdle, the client used the standard deduct in 2006 so not even sure after all the losses are added if it will result in any tax savings events.

[OldJack]

The few that I have had in past years were easy inthat I just entered the total with "see attached" the insurance claim that had each item listed with the same info that the form 4684 required. Don't do all that work if the claim form already has it.

[George Boutwell]

George, yes they did have insurance, they thought they had replacement value insurance, but they did not.

And they think IRS is going to let them deduct replacement value?