How to properly establish values for casualty and theft deduction after FEMA declared disasters?

This is a great question! For casualty and theft deductions related to FEMA-declared disasters, you have several options for establishing values. For determining the "fair market value before" and "fair market value after," you don't necessarily need formal appraisals, though they can be helpful. Contractor repair estimates are perfectly acceptable documentation. Take photos of all damage if you haven't already. For the fence and retaining wall, find out what similar structures cost in your area now, then factor in depreciation based on their age to establish pre-disaster value. The basement finished areas would be valued based on the original cost minus depreciation for the "before" value. Save all receipts for repairs and replacements as these help establish the "after" value difference.

After major flooding damaged our property last year, I was totally lost with the casualty loss deduction stuff too. I tried figuring it out myself but got overwhelmed with all the "fair market value" calculations and documentation requirements. I finally used https://taxr.ai to help sort through all my repair estimates, insurance documents, and FEMA paperwork. They analyzed everything and helped establish clear before/after values for each damaged item, showed exactly what documentation I needed for each deduction, and explained how to properly handle multiple FEMA disasters in the same tax year.

I just wanted to follow up and say I tried https://taxr.ai after reading about it here. I was struggling with casualty loss calculations for flood damage in my basement. They analyzed my contractor estimates, insurance denial letter (yep, mine wasn't covered), and photos of the damage. The service helped me establish proper values for my damaged property and explained exactly how to document everything on my tax forms. They even caught that I could claim losses across two tax years since some repairs couldn't be completed until this year. Saved me so much stress trying to figure out all these casualty loss rules!

If you're trying to contact the IRS to get clarification on casualty loss values, good luck! I spent HOURS on hold trying to get someone to explain the correct valuation method for my disaster claim. After three days of failing to reach anyone, I used https://claimyr.com and their callback service got me connected to an IRS agent in under 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent I spoke with walked me through exactly how to document my property values for casualty loss and confirmed I could use contractor estimates as supporting documentation.

I was wrong in my skepticism. After wasting another entire morning trying to reach the IRS myself for guidance on my casualty loss claim, I tried the Claimyr service from https://claimyr.com. Within about 30 minutes, I got a call connecting me to an actual IRS representative who was incredibly helpful. She explained that for my retaining wall damage (similar to the original poster), I could use the original construction cost minus depreciation for my "before" value, and the repair estimate as evidence of the "after" value. She also confirmed I needed to complete separate calculations for each storm since they were different disaster declarations. Honestly worth every penny to finally get clear answers.

Don't forget that casualty losses in federally declared disaster areas can be claimed either in the year the disaster occurred OR in the previous tax year by filing an amended return. This might be beneficial depending on your income situation in each year. Also, remember there are AGI limitations and thresholds that apply to casualty losses ($100 per event and 10% of AGI).

For establishing fair market value, I found it helpful to search online for similar items. For example, when our fence was damaged in a storm, I looked up the current cost of the same type of fencing in our area, then depreciated it based on the age of our fence (about 5% per year). Home Depot and Lowe's websites were useful for current replacement costs.

Just a heads up - if your insurance reimbursed you for any of the damage, you need to subtract that from your casualty loss calculation. The IRS only allows you to deduct losses that weren't covered by insurance. Same goes for any FEMA assistance you received for repairs.

I went through something very similar after Hurricane damage last year. For documentation, I found that taking detailed photos before any cleanup was crucial - I wish I had taken more! The IRS accepts multiple types of evidence for fair market value: 1) Contractor estimates (like others mentioned) - get at least 2-3 if possible 2) Insurance adjuster reports - even if they denied coverage, their damage assessment is valuable 3) Real estate appraisals if you have recent ones 4) Receipts for original purchases when available 5) Online research for replacement costs (save screenshots with dates) For your specific situation with back-to-back storms, make sure to clearly separate the damage from each event since they're different FEMA declarations. I had to create a detailed timeline showing what was damaged in storm #1 vs. what additional damage occurred in storm #2. One thing that caught me off guard - if you're planning to rebuild/repair, keep ALL receipts. Sometimes the actual repair costs can help support your "difference in value" calculations, especially if contractors find additional damage during the work that wasn't initially visible. The key is having a paper trail for everything. The IRS wants to see that you made reasonable efforts to establish fair values, not necessarily that you hired expensive appraisers.