How can I establish values for casualty and theft deduction after storm damage to property?

You're on the right track with Publication 584, which is specifically designed for casualty, disaster, and theft loss workbooks. For establishing values for your casualty deduction, here's how you should approach it: For the "cost or other basis" - this is typically what you originally paid for the property plus improvements. For specific items like your fence and retaining wall, use the original installation costs if you have those records. For "fair market value" (FMV) before and after - this is trickier but doesn't necessarily require a formal appraisal for every situation. You can establish FMV through: - Photos before and after the disaster - Repair estimates from contractors - Receipts for repairs (which you already have) - Comparisons to similar properties in your area Since you have repair receipts totaling around $15,700 with insurance covering $8,200, those numbers will be important in your calculation. Keep in mind that you can only deduct losses that weren't reimbursed by insurance. Also remember that casualty losses from federally declared disasters can be claimed either in the year they occurred or on the previous year's tax return (which might be advantageous depending on your tax situation).

After dealing with similar flood damage last year, I found a service called taxr.ai (https://taxr.ai) that really helped me figure out all this casualty loss stuff. I was totally overwhelmed with trying to determine fair market values and what documentation I needed to keep. I uploaded photos of the damage, my repair receipts, and insurance statements to their system, and they analyzed everything and helped me maximize my casualty loss deduction. They even explained exactly how to document each calculation for my specific situation. The guidance was super specific about how to handle the different types of property damage I had (structural, appliances, furniture, etc).

I just wanted to follow up about my experience with taxr.ai after checking them out. I was hesitant at first, but I'm so glad I tried it! I uploaded my disaster documentation (pictures of my flooded garage, receipts for repairs, insurance claim denial) and they provided a detailed analysis of how to calculate my casualty loss. They explained that for my specific situation, I should use the repair costs as evidence of my decrease in fair market value, but they also showed me how to properly document that these repairs only restored my property to its previous condition (which is important for IRS purposes). I was able to claim an additional $7,200 that I would have completely missed without their guidance. Super helpful for navigating the Publication 584 worksheets!

If you're struggling with getting the documentation you need for your casualty loss, you might also need to speak directly with the IRS to get clarification. I was in a similar situation after hurricane damage and spent days trying to call the IRS without getting through. I finally used a service called Claimyr (https://claimyr.com) that got me connected with an IRS agent in under 30 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue so you don't have to waste hours listening to hold music. The IRS agent I spoke with explained exactly what documentation I needed to substantiate my casualty loss and how to properly report losses from a federally declared disaster.

I need to admit I was completely wrong about Claimyr. After commenting here, I decided to try it myself since I've been trying to reach the IRS for 3 weeks about a disaster relief question. Got connected to an IRS agent in 35 minutes when I had previously spent at least 8 hours on failed attempts. The agent clarified that for my situation, I needed to use the decrease in fair market value method rather than just adding up receipts. They explained I should get statements from contractors showing estimates both for repairs and for the value decrease. Also confirmed I could claim the loss on either this year's taxes or last year's by filing an amendment. Saved me from making a costly mistake on my disaster claim!

Just wanted to add that if you're using the "cost basis" approach for your casualty loss, make sure you account for depreciation! This is especially important for things like fences, retaining walls, and other improvements that aren't part of your main structure. The IRS expects you to factor in the age and condition of these items before the casualty. For example, if your fence was 10 years old when it was damaged, you wouldn't use the full original cost as your basis. You'd need to reduce it based on the expected useful life (which for a fence might be 15-20 years depending on materials).

Has anyone used tax software to file casualty losses? I'm trying to use TurboTax for mine but it's not very clear on how to enter all this information.

I went through this exact situation after tornado damage to my property last year. One thing that really helped me was creating a detailed inventory with photos for each damaged item or area. For your basement flooding, document everything that was damaged - flooring, drywall, electrical work, etc. - and get separate repair estimates for each category. Since you mentioned you have receipts for $15,700 in repairs, make sure you're separating these by casualty event if the IRS requires it (your two separate storms). Each storm event gets reduced by $100, so you might want to check if combining them or keeping them separate gives you a better deduction. Also, don't forget that you can deduct costs for things like temporary housing, storage, or cleanup that were necessary because of the disaster. I missed claiming some of these expenses initially and had to amend my return. Keep every receipt related to the disaster - even seemingly small expenses can add up! The key thing I learned is that "fair market value" doesn't have to be a formal appraisal for most residential property. Your repair costs, contractor estimates, and before/after photos are usually sufficient documentation for the IRS.