IRS Deudctions
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Figuring Decrease in FMV

Car values

If your car is damaged or stolen, the books issued by various automobile organizations that list your car may be used in figuring the value of your car. You can modify the book's retail value by such factors as mileage and the condition of your car. A dealers offer for your car as a trade in on a new car is not usually a measure of the true value of the car.


Costs that cannot be included to decrease the fair market value

Generally, you cannot consider the following items in figuring the decrease in the FMV of your property.

  • The cost of replacing stolen or destroyed property.

  • The cost of protecting your property through insurance or temporary measures such as boarding up windows. If you make permanent improvements to your property to protect tit against casualty or theft, add the costs of the improvements tot he basis of your property.

  • Costs related to the casualty or theft such as expenses for treatment of personal injury, for temporary housing or for a rental car.

  • Sentimental value of a family heirloom or keepsake.

  • Decrease in the market value of your property because your are in or near an area that suffered a casualty.

  • The cost of photographs you took to establish the condition and value of your property after it was damaged. You can claim this cost as a limited miscellaneous deduction on Schedule A, subject to 2% of your AGI.
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