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H&r Block Tax Estimator

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H&r Block Tax Estimator

H&r block tax estimator Publication 547 - Main Content Table of Contents CasualtyFamily pet. H&r block tax estimator Progressive deterioration. H&r block tax estimator Special Procedure for Damage From Corrosive Drywall Theft Loss on Deposits Proof of Loss Figuring a LossGain from reimbursement. H&r block tax estimator Business or income-producing property. H&r block tax estimator Loss of inventory. H&r block tax estimator Leased property. H&r block tax estimator Exception for personal-use real property. H&r block tax estimator Decrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Deduction Limits2% Rule $100 Rule 10% Rule Figuring the Deduction Figuring a GainPostponement of Gain When To Report Gains and LossesLoss on deposits. H&r block tax estimator Lessee's loss. H&r block tax estimator Disaster Area LossesDisaster loss to inventory. H&r block tax estimator Main home in disaster area. H&r block tax estimator Unsafe home. H&r block tax estimator Time limit for making choice. H&r block tax estimator Revoking your choice. H&r block tax estimator Figuring the loss deduction. H&r block tax estimator How to report the loss on Form 1040X. H&r block tax estimator Records. H&r block tax estimator Need a copy of your tax return for the preceding year? Postponed Tax Deadlines Contacting the Federal Emergency Management Agency (FEMA) How To Report Gains and LossesProperty held 1 year or less. H&r block tax estimator Property held more than 1 year. H&r block tax estimator Depreciable property. H&r block tax estimator Adjustments to Basis If Deductions Are More Than Income How To Get Tax HelpLow Income Taxpayer Clinics Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. H&r block tax estimator A sudden event is one that is swift, not gradual or progressive. H&r block tax estimator An unexpected event is one that is ordinarily unanticipated and unintended. H&r block tax estimator An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. H&r block tax estimator Generally, casualty losses are deductible during the taxable year that the loss occurred. H&r block tax estimator See Table 3, later. H&r block tax estimator Deductible losses. H&r block tax estimator   Deductible casualty losses can result from a number of different causes, including the following. H&r block tax estimator Car accidents (but see Nondeductible losses , next, for exceptions). H&r block tax estimator Earthquakes. H&r block tax estimator Fires (but see Nondeductible losses , next, for exceptions). H&r block tax estimator Floods. H&r block tax estimator Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses , later. H&r block tax estimator Mine cave-ins. H&r block tax estimator Shipwrecks. H&r block tax estimator Sonic booms. H&r block tax estimator Storms, including hurricanes and tornadoes. H&r block tax estimator Terrorist attacks. H&r block tax estimator Vandalism. H&r block tax estimator Volcanic eruptions. H&r block tax estimator Nondeductible losses. H&r block tax estimator   A casualty loss is not deductible if the damage or destruction is caused by the following. H&r block tax estimator Accidentally breaking articles such as glassware or china under normal conditions. H&r block tax estimator A family pet (explained below). H&r block tax estimator A fire if you willfully set it, or pay someone else to set it. H&r block tax estimator A car accident if your willful negligence or willful act caused it. H&r block tax estimator The same is true if the willful act or willful negligence of someone acting for you caused the accident. H&r block tax estimator Progressive deterioration (explained below). H&r block tax estimator However, see Special Procedure for Damage From Corrosive Drywall , later. H&r block tax estimator Family pet. H&r block tax estimator   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. H&r block tax estimator Example. H&r block tax estimator Your antique oriental rug was damaged by your new puppy before it was housebroken. H&r block tax estimator Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. H&r block tax estimator Progressive deterioration. H&r block tax estimator   Loss of property due to progressive deterioration is not deductible as a casualty loss. H&r block tax estimator This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. H&r block tax estimator The following are examples of damage due to progressive deterioration. H&r block tax estimator The steady weakening of a building due to normal wind and weather conditions. H&r block tax estimator The deterioration and damage to a water heater that bursts. H&r block tax estimator However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. H&r block tax estimator Most losses of property caused by droughts. H&r block tax estimator To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. H&r block tax estimator Termite or moth damage. H&r block tax estimator The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. H&r block tax estimator However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. H&r block tax estimator Special Procedure for Damage From Corrosive Drywall Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. H&r block tax estimator Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. H&r block tax estimator For example, amounts you paid for repairs in 2013 are deductible on your 2013 tax return and amounts you paid for repairs in 2012 are deductible on your 2012 tax return. H&r block tax estimator Note. H&r block tax estimator If you paid for any repairs before 2013 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U. H&r block tax estimator S. H&r block tax estimator Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. H&r block tax estimator Form 4684 for the appropriate year can be found at IRS. H&r block tax estimator gov. H&r block tax estimator Generally, Form 1040X must be filed within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. H&r block tax estimator Corrosive drywall. H&r block tax estimator   For purposes of this special procedure, “corrosive drywall” means drywall that is identified as problem drywall under the two-step identification method published by the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) in their interim guidance dated January 28, 2010, as revised by the CPSC and HUD. H&r block tax estimator The revised identification guidance and remediation guidelines are available at www. H&r block tax estimator cpsc. H&r block tax estimator gov/Safety-Education/Safety-Education-Centers/Drywall. H&r block tax estimator Special instructions for completing Form 4684. H&r block tax estimator   If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. H&r block tax estimator The IRS will not challenge your treatment of damage resulting from corrosive drywall as a casualty loss if you determine and report the loss as explained below. H&r block tax estimator Top margin of Form 4684. H&r block tax estimator   Enter “Revenue Procedure 2010-36”. H&r block tax estimator Line 1. H&r block tax estimator   Enter the information required by the line 1 instructions. H&r block tax estimator Line 2. H&r block tax estimator   Skip this line. H&r block tax estimator Line 3. H&r block tax estimator   Enter the amount of insurance or other reimbursements you received (including through litigation). H&r block tax estimator If none, enter -0-. H&r block tax estimator Lines 4–7. H&r block tax estimator   Skip these lines. H&r block tax estimator Line 8. H&r block tax estimator   Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. H&r block tax estimator Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. H&r block tax estimator Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. H&r block tax estimator If you replaced a household appliance instead of repairing it, enter the lesser of: The current cost to replace the original appliance, or The basis of the original appliance (generally its cost). H&r block tax estimator Line 9. H&r block tax estimator   If line 8 is more than line 3, do one of the following. H&r block tax estimator If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8. H&r block tax estimator If item (1) does not apply to you, enter the full amount of the difference between lines 3 and 8. H&r block tax estimator If line 8 is less than or equal to line 3, you cannot claim a casualty loss deduction using this special procedure. H&r block tax estimator    If you have a pending claim for reimbursement (or you intend to pursue reimbursement), you may have income or an additional deduction in a later tax year depending on the actual amount of reimbursement received. H&r block tax estimator See Reimbursement Received After Deducting Loss, later. H&r block tax estimator Lines 10–18. H&r block tax estimator   Complete these lines according to the Instructions for Form 4684. H&r block tax estimator Choosing not to follow this special procedure. H&r block tax estimator   If you choose not to follow this special procedure, you are subject to all of the provisions that apply to the deductibility of casualty losses, and you must complete lines 1–9 according to the Instructions for Form 4684. H&r block tax estimator This means, for example, that you must establish that the damage, destruction, or loss of property resulted from an identifiable event as defined earlier under Casualty . H&r block tax estimator Furthermore, you must have proof that shows the following. H&r block tax estimator The loss is properly deductible in the tax year you claimed it and not in some other year. H&r block tax estimator See When To Report Gains and Losses , later. H&r block tax estimator The amount of the claimed loss. H&r block tax estimator See Proof of Loss , later. H&r block tax estimator No claim for reimbursement of any portion of the loss exists for which there is a reasonable prospect of recovery. H&r block tax estimator See When To Report Gains and Losses , later. H&r block tax estimator Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. H&r block tax estimator The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. H&r block tax estimator You do not need to show a conviction for theft. H&r block tax estimator Theft includes the taking of money or property by the following means. H&r block tax estimator Blackmail. H&r block tax estimator Burglary. H&r block tax estimator Embezzlement. H&r block tax estimator Extortion. H&r block tax estimator Kidnapping for ransom. H&r block tax estimator Larceny. H&r block tax estimator Robbery. H&r block tax estimator The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. H&r block tax estimator Decline in market value of stock. H&r block tax estimator   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. H&r block tax estimator However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. H&r block tax estimator You report a capital loss on Schedule D (Form 1040). H&r block tax estimator For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. H&r block tax estimator Mislaid or lost property. H&r block tax estimator    The simple disappearance of money or property is not a theft. H&r block tax estimator However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. H&r block tax estimator Sudden, unexpected, and unusual events were defined earlier under Casualty . H&r block tax estimator Example. H&r block tax estimator A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. H&r block tax estimator The diamond falls from the ring and is never found. H&r block tax estimator The loss of the diamond is a casualty. H&r block tax estimator Losses from Ponzi-type investment schemes. H&r block tax estimator   The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes: Revenue Ruling 2009-9, 2009-14 I. H&r block tax estimator R. H&r block tax estimator B. H&r block tax estimator 735 (available at www. H&r block tax estimator irs. H&r block tax estimator gov/irb/2009-14_IRB/ar07. H&r block tax estimator html). H&r block tax estimator Revenue Procedure 2009-20, 2009-14 I. H&r block tax estimator R. H&r block tax estimator B. H&r block tax estimator 749 (available at www. H&r block tax estimator irs. H&r block tax estimator gov/irb/2009-14_IRB/ar11. H&r block tax estimator html). H&r block tax estimator Revenue Procedure 2011-58, 2011-50 I. H&r block tax estimator R. H&r block tax estimator B. H&r block tax estimator 847 (available at www. H&r block tax estimator irs. H&r block tax estimator gov/irb/2011-50_IRB/ar11. H&r block tax estimator html). H&r block tax estimator If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. H&r block tax estimator Skip lines 19 to 27, but you must fill out Section B, lines 29 to 39, as appropriate. H&r block tax estimator Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. H&r block tax estimator You do not need to complete Appendix A. H&r block tax estimator For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. H&r block tax estimator   If you choose not to use the procedures in Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. H&r block tax estimator Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. H&r block tax estimator If you incurred this type of loss, you can choose one of the following ways to deduct the loss. H&r block tax estimator As a casualty loss. H&r block tax estimator As an ordinary loss. H&r block tax estimator As a nonbusiness bad debt. H&r block tax estimator Casualty loss or ordinary loss. H&r block tax estimator   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. H&r block tax estimator The choice generally is made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. H&r block tax estimator If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. H&r block tax estimator However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. H&r block tax estimator Once you make the choice, you cannot change it without permission from the Internal Revenue Service. H&r block tax estimator   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. H&r block tax estimator The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. H&r block tax estimator Your loss is subject to the 2%-of-adjusted-gross-income limit. H&r block tax estimator You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. H&r block tax estimator Nonbusiness bad debt. H&r block tax estimator   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. H&r block tax estimator How to report. H&r block tax estimator   The kind of deduction you choose for your loss on deposits determines how you report your loss. H&r block tax estimator See Table 1. H&r block tax estimator More information. H&r block tax estimator   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684. H&r block tax estimator Deducted loss recovered. H&r block tax estimator   If you recover an amount you deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of recovery. H&r block tax estimator If any part of the original deduction did not reduce your tax in the earlier year, you do not have to include that part of the recovery in your income. H&r block tax estimator For more information, see Recoveries in Publication 525. H&r block tax estimator Proof of Loss To deduct a casualty or theft loss, you must be able to show that there was a casualty or theft. H&r block tax estimator You also must be able to support the amount you take as a deduction. H&r block tax estimator Casualty loss proof. H&r block tax estimator   For a casualty loss, you should be able to show all of the following. H&r block tax estimator The type of casualty (car accident, fire, storm, etc. H&r block tax estimator ) and when it occurred. H&r block tax estimator That the loss was a direct result of the casualty. H&r block tax estimator That you were the owner of the property, or if you leased the property from someone else, that you were contractually liable to the owner for the damage. H&r block tax estimator Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. H&r block tax estimator Theft loss proof. H&r block tax estimator   For a theft loss, you should be able to show all of the following. H&r block tax estimator When you discovered that your property was missing. H&r block tax estimator That your property was stolen. H&r block tax estimator That you were the owner of the property. H&r block tax estimator Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. H&r block tax estimator    It is important that you have records that will prove your deduction. H&r block tax estimator If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. H&r block tax estimator Figuring a Loss To determine your deduction for a casualty or theft loss, you must first figure your loss. H&r block tax estimator Table 1. H&r block tax estimator Reporting Loss on Deposits IF you choose to report the loss as a(n). H&r block tax estimator . H&r block tax estimator . H&r block tax estimator   THEN report it on. H&r block tax estimator . H&r block tax estimator . H&r block tax estimator casualty loss   Form 4684 and Schedule A  (Form 1040). H&r block tax estimator ordinary loss   Schedule A (Form 1040). H&r block tax estimator nonbusiness bad debt   Form 8949 and Schedule D (Form 1040). H&r block tax estimator Amount of loss. H&r block tax estimator   Figure the amount of your loss using the following steps. H&r block tax estimator Determine your adjusted basis in the property before the casualty or theft. H&r block tax estimator Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. H&r block tax estimator From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. H&r block tax estimator For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. H&r block tax estimator Gain from reimbursement. H&r block tax estimator   If your reimbursement is more than your adjusted basis in the property, you have a gain. H&r block tax estimator This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. H&r block tax estimator If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. H&r block tax estimator See Figuring a Gain , later. H&r block tax estimator Business or income-producing property. H&r block tax estimator   If you have business or income-producing property, such as rental property, and it is stolen or completely destroyed, the decrease in FMV is not considered. H&r block tax estimator Your loss is figured as follows:   Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive   Loss of inventory. H&r block tax estimator   There are two ways you can deduct a casualty or theft loss of inventory, including items you hold for sale to customers. H&r block tax estimator   One way is to deduct the loss through the increase in the cost of goods sold by properly reporting your opening and closing inventories. H&r block tax estimator Do not claim this loss again as a casualty or theft loss. H&r block tax estimator If you take the loss through the increase in the cost of goods sold, include any insurance or other reimbursement you receive for the loss in gross income. H&r block tax estimator   The other way is to deduct the loss separately. H&r block tax estimator If you deduct it separately, eliminate the affected inventory items from the cost of goods sold by making a downward adjustment to opening inventory or purchases. H&r block tax estimator Reduce the loss by the reimbursement you received. H&r block tax estimator Do not include the reimbursement in gross income. H&r block tax estimator If you do not receive the reimbursement by the end of the year, you may not claim a loss to the extent you have a reasonable prospect of recovery. H&r block tax estimator Leased property. H&r block tax estimator   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. H&r block tax estimator Separate computations. H&r block tax estimator   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. H&r block tax estimator Then combine the losses to determine the total loss from that casualty or theft. H&r block tax estimator Exception for personal-use real property. H&r block tax estimator   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. H&r block tax estimator Figure the loss using the smaller of the following. H&r block tax estimator The decrease in FMV of the entire property. H&r block tax estimator The adjusted basis of the entire property. H&r block tax estimator   See Real property under Figuring the Deduction, later. H&r block tax estimator Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. H&r block tax estimator The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. H&r block tax estimator FMV of stolen property. H&r block tax estimator   The FMV of property immediately after a theft is considered to be zero because you no longer have the property. H&r block tax estimator Example. H&r block tax estimator Several years ago, you purchased silver dollars at face value for $150. H&r block tax estimator This is your adjusted basis in the property. H&r block tax estimator Your silver dollars were stolen this year. H&r block tax estimator The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. H&r block tax estimator Your theft loss is $150. H&r block tax estimator Recovered stolen property. H&r block tax estimator   Recovered stolen property is your property that was stolen and later returned to you. H&r block tax estimator If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. H&r block tax estimator Use this amount to refigure your total loss for the year in which the loss was deducted. H&r block tax estimator   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. H&r block tax estimator But report the difference only up to the amount of the loss that reduced your tax. H&r block tax estimator For more information on the amount to report, see Recoveries in Publication 525. H&r block tax estimator Figuring Decrease in FMV — Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. H&r block tax estimator However, other measures also can be used to establish certain decreases. H&r block tax estimator See Appraisal and Cost of cleaning up or making repairs , next. H&r block tax estimator Appraisal. H&r block tax estimator   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterwards should be made by a competent appraiser. H&r block tax estimator The appraiser must recognize the effects of any general market decline that may occur along with the casualty. H&r block tax estimator This information is needed to limit any deduction to the actual loss resulting from damage to the property. H&r block tax estimator   Several factors are important in evaluating the accuracy of an appraisal, including the following. H&r block tax estimator The appraiser's familiarity with your property before and after the casualty or theft. H&r block tax estimator The appraiser's knowledge of sales of comparable property in the area. H&r block tax estimator The appraiser's knowledge of conditions in the area of the casualty. H&r block tax estimator The appraiser's method of appraisal. H&r block tax estimator You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. H&r block tax estimator For more information on disasters, see Disaster Area Losses, later. H&r block tax estimator Cost of cleaning up or making repairs. H&r block tax estimator   The cost of repairing damaged property is not part of a casualty loss. H&r block tax estimator Neither is the cost of cleaning up after a casualty. H&r block tax estimator But you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. H&r block tax estimator The repairs are actually made. H&r block tax estimator The repairs are necessary to bring the property back to its condition before the casualty. H&r block tax estimator The amount spent for repairs is not excessive. H&r block tax estimator The repairs take care of the damage only. H&r block tax estimator The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. H&r block tax estimator Landscaping. H&r block tax estimator   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. H&r block tax estimator You may be able to measure your loss by what you spend on the following. H&r block tax estimator Removing destroyed or damaged trees and shrubs, minus any salvage you receive. H&r block tax estimator Pruning and other measures taken to preserve damaged trees and shrubs. H&r block tax estimator Replanting necessary to restore the property to its approximate value before the casualty. H&r block tax estimator Car value. H&r block tax estimator   Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. H&r block tax estimator You can use the books' retail values and modify them by factors such as the mileage and condition of your car to figure its value. H&r block tax estimator The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. H&r block tax estimator If your car is not listed in the books, determine its value from other sources. H&r block tax estimator A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. H&r block tax estimator Figuring Decrease in FMV — Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. H&r block tax estimator Cost of protection. H&r block tax estimator   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. H&r block tax estimator The amount you spend on insurance or to board up your house against a storm is not part of your loss. H&r block tax estimator If the property is business property, these expenses are deductible as business expenses. H&r block tax estimator   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. H&r block tax estimator An example would be the cost of a dike to prevent flooding. H&r block tax estimator Exception. H&r block tax estimator   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments (discussed later under Disaster Area Losses ). H&r block tax estimator Related expenses. H&r block tax estimator   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. H&r block tax estimator However, they may be deductible as business expenses if the damaged or stolen property is business property. H&r block tax estimator Replacement cost. H&r block tax estimator   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. H&r block tax estimator Example. H&r block tax estimator You bought a new chair 4 years ago for $300. H&r block tax estimator In April, a fire destroyed the chair. H&r block tax estimator You estimate that it would cost $500 to replace it. H&r block tax estimator If you had sold the chair before the fire, you estimate that you could have received only $100 for it because it was 4 years old. H&r block tax estimator The chair was not insured. H&r block tax estimator Your loss is $100, the FMV of the chair before the fire. H&r block tax estimator It is not $500, the replacement cost. H&r block tax estimator Sentimental value. H&r block tax estimator   Do not consider sentimental value when determining your loss. H&r block tax estimator If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. H&r block tax estimator Decline in market value of property in or near casualty area. H&r block tax estimator   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. H&r block tax estimator You have a loss only for actual casualty damage to your property. H&r block tax estimator However, if your home is in a federally declared disaster area, see Disaster Area Losses , later. H&r block tax estimator Costs of photographs and appraisals. H&r block tax estimator   Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. H&r block tax estimator Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. H&r block tax estimator   Appraisals are used to figure the decrease in FMV because of a casualty or theft. H&r block tax estimator See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. H&r block tax estimator   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. H&r block tax estimator They are expenses in determining your tax liability. H&r block tax estimator You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). H&r block tax estimator Adjusted Basis The measure of your investment in the property you own is its basis. H&r block tax estimator For property you buy, your basis is usually its cost to you. H&r block tax estimator For property you acquire in some other way, such as inheriting it, receiving it as a gift, or getting it in a nontaxable exchange, you must figure your basis in another way, as explained in Publication 551. H&r block tax estimator If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. H&r block tax estimator Adjustments to basis. H&r block tax estimator    While you own the property, various events may take place that change your basis. H&r block tax estimator Some events, such as additions or permanent improvements to the property, increase basis. H&r block tax estimator Others, such as earlier casualty losses and depreciation deductions, decrease basis. H&r block tax estimator When you add the increases to the basis and subtract the decreases from the basis, the result is your adjusted basis. H&r block tax estimator See Publication 551 for more information on figuring the basis of your property. H&r block tax estimator Insurance and Other Reimbursements If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. H&r block tax estimator You do not have a casualty or theft loss to the extent you are reimbursed. H&r block tax estimator If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. H&r block tax estimator You must reduce your loss even if you do not receive payment until a later tax year. H&r block tax estimator See Reimbursement Received After Deducting Loss , later. H&r block tax estimator Failure to file a claim for reimbursement. H&r block tax estimator   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. H&r block tax estimator Otherwise, you cannot deduct this loss as a casualty or theft. H&r block tax estimator The portion of the loss usually not covered by insurance (for example, a deductible) is not subject to this rule. H&r block tax estimator Example. H&r block tax estimator You have a car insurance policy with a $1,000 deductible. H&r block tax estimator Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the $100 and 10% rules, discussed later). H&r block tax estimator This is true, even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. H&r block tax estimator Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. H&r block tax estimator Other types of reimbursements are discussed next. H&r block tax estimator Also see the Instructions for Form 4684. H&r block tax estimator Employer's emergency disaster fund. H&r block tax estimator   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. H&r block tax estimator Take into consideration only the amount you used to replace your destroyed or damaged property. H&r block tax estimator Example. H&r block tax estimator Your home was extensively damaged by a tornado. H&r block tax estimator Your loss after reimbursement from your insurance company was $10,000. H&r block tax estimator Your employer set up a disaster relief fund for its employees. H&r block tax estimator Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. H&r block tax estimator You received $4,000 from the fund and spent the entire amount on repairs to your home. H&r block tax estimator In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. H&r block tax estimator Your casualty loss before applying the deduction limits (discussed later) is $6,000. H&r block tax estimator Cash gifts. H&r block tax estimator   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. H&r block tax estimator This applies even if you use the money to pay for repairs to property damaged in the disaster. H&r block tax estimator Example. H&r block tax estimator Your home was damaged by a hurricane. H&r block tax estimator Relatives and neighbors made cash gifts to you that were excludable from your income. H&r block tax estimator You used part of the cash gifts to pay for repairs to your home. H&r block tax estimator There were no limits or restrictions on how you could use the cash gifts. H&r block tax estimator It was an excludable gift, so the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. H&r block tax estimator Insurance payments for living expenses. H&r block tax estimator   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. H&r block tax estimator You lose the use of your main home because of a casualty. H&r block tax estimator Government authorities do not allow you access to your main home because of a casualty or threat of one. H&r block tax estimator Inclusion in income. H&r block tax estimator   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. H&r block tax estimator Report this amount on Form 1040, line 21. H&r block tax estimator However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. H&r block tax estimator See Qualified disaster relief payments , later, under Disaster Area Losses. H&r block tax estimator   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. H&r block tax estimator Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. H&r block tax estimator Generally, these expenses include the amounts you pay for the following. H&r block tax estimator Renting suitable housing. H&r block tax estimator Transportation. H&r block tax estimator Food. H&r block tax estimator Utilities. H&r block tax estimator Miscellaneous services. H&r block tax estimator Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. H&r block tax estimator Example. H&r block tax estimator As a result of a fire, you vacated your apartment for a month and moved to a motel. H&r block tax estimator You normally pay $525 a month for rent. H&r block tax estimator None was charged for the month the apartment was vacated. H&r block tax estimator Your motel rent for this month was $1,200. H&r block tax estimator You normally pay $200 a month for food. H&r block tax estimator Your food expenses for the month you lived in the motel were $400. H&r block tax estimator You received $1,100 from your insurance company to cover your living expenses. H&r block tax estimator You determine the payment you must include in income as follows. H&r block tax estimator 1. H&r block tax estimator Insurance payment for living expenses $1,100 2. H&r block tax estimator Actual expenses during the month you are unable to use your home because of the fire $1,600   3. H&r block tax estimator Normal living expenses 725   4. H&r block tax estimator Temporary increase in living expenses: Subtract line 3  from line 2 875 5. H&r block tax estimator Amount of payment includible in income: Subtract line 4 from line 1 $ 225 Tax year of inclusion. H&r block tax estimator   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. H&r block tax estimator Example. H&r block tax estimator Your main home was destroyed by a tornado in August 2011. H&r block tax estimator You regained use of your home in November 2012. H&r block tax estimator The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. H&r block tax estimator You include this amount in income on your 2012 Form 1040. H&r block tax estimator If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. H&r block tax estimator Disaster relief. H&r block tax estimator   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. H&r block tax estimator Table 2. H&r block tax estimator Deduction Limit Rules for Personal-Use and Employee Property       $100 Rule 10% Rule 2% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. H&r block tax estimator Apply this rule to personal-use property after you have figured the amount of your loss. H&r block tax estimator You must reduce your total casualty or theft loss by 10% of your adjusted gross income. H&r block tax estimator Apply this rule to personal-use property after you reduce each loss by $100 (the $100 rule). H&r block tax estimator You must reduce your total casualty or theft loss by 2% of your adjusted gross income. H&r block tax estimator Apply this rule to property you used in performing services as an employee after you have figured the amount of your loss and added it to your job expenses and most other miscellaneous itemized deductions. H&r block tax estimator Single Event Apply this rule only once, even if many pieces of property are affected. H&r block tax estimator Apply this rule only once, even if many pieces of property are affected. H&r block tax estimator Apply this rule only once, even if many pieces of property are affected. H&r block tax estimator More Than One Event Apply to the loss from each event. H&r block tax estimator Apply to the total of all your losses from all events. H&r block tax estimator Apply to the total of all your losses from all events. H&r block tax estimator More Than One Person— With Loss From the   Same Event  (other than a married couple  filing jointly) Apply separately to each person. H&r block tax estimator Apply separately to each person. H&r block tax estimator Apply separately to each person. H&r block tax estimator Married Couple—  With Loss From the  Same Event Filing Joint Return Apply as if you were one person. H&r block tax estimator Apply as if you were one person. H&r block tax estimator Apply as if you were one person. H&r block tax estimator Filing Separate Return Apply separately to each spouse. H&r block tax estimator Apply separately to each spouse. H&r block tax estimator Apply separately to each spouse. H&r block tax estimator More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. H&r block tax estimator Apply separately to each owner of jointly owned property. H&r block tax estimator Apply separately to each owner of jointly owned property. H&r block tax estimator    Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster, are not taxable income to you. H&r block tax estimator For more information, see Qualified disaster relief payments under Disaster Area Losses, later. H&r block tax estimator   Disaster unemployment assistance payments are unemployment benefits that are taxable. H&r block tax estimator   Generally, disaster relief grants received under the Robert T. H&r block tax estimator Stafford Disaster Relief and Emergency Assistance Act are not included in your income. H&r block tax estimator See Federal disaster relief grants , later, under Disaster Area Losses. H&r block tax estimator Loan proceeds. H&r block tax estimator   Do not reduce your casualty loss by loan proceeds you use to rehabilitate or replace property on which you are claiming a casualty loss deduction. H&r block tax estimator If you have a federal loan that is canceled (forgiven), see Federal loan canceled , later, under Disaster Area Losses. H&r block tax estimator Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. H&r block tax estimator This section explains the adjustment you may have to make. H&r block tax estimator Actual reimbursement less than expected. H&r block tax estimator   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. H&r block tax estimator Example. H&r block tax estimator Your personal car had a FMV of $2,000 when it was destroyed in a collision with another car in 2012. H&r block tax estimator The accident was due to the negligence of the other driver. H&r block tax estimator At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. H&r block tax estimator You did not have a deductible loss in 2012. H&r block tax estimator In January 2013, the court awards you a judgment of $2,000. H&r block tax estimator However, in July it becomes apparent that you will be unable to collect any amount from the other driver. H&r block tax estimator Since this is your only casualty or theft loss, you can deduct the loss in 2013 that is figured by applying the Deduction Limits (discussed later). H&r block tax estimator Actual reimbursement more than expected. H&r block tax estimator   If you later receive more reimbursement than you expected, after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. H&r block tax estimator However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. H&r block tax estimator You do not refigure your tax for the year you claimed the deduction. H&r block tax estimator See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. H&r block tax estimator Example. H&r block tax estimator In 2012, a hurricane destroyed your motorboat. H&r block tax estimator Your loss was $3,000, and you estimated that your insurance would cover $2,500 of it. H&r block tax estimator You did not itemize deductions on your 2012 return, so you could not deduct the loss. H&r block tax estimator When the insurance company reimburses you for the loss, you do not report any of the reimbursement as income. H&r block tax estimator This is true even if it is for the full $3,000 because you did not deduct the loss on your 2012 return. H&r block tax estimator The loss did not reduce your tax. H&r block tax estimator    If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. H&r block tax estimator If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. H&r block tax estimator Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. H&r block tax estimator You may be able to postpone reporting any remaining gain as explained under Postponement of Gain, later. H&r block tax estimator Actual reimbursement same as expected. H&r block tax estimator   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. H&r block tax estimator Example. H&r block tax estimator In December 2013, you had a collision while driving your personal car. H&r block tax estimator Repairs to the car cost $950. H&r block tax estimator You had $100 deductible collision insurance. H&r block tax estimator Your insurance company agreed to reimburse you for the rest of the damage. H&r block tax estimator Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. H&r block tax estimator Due to the $100 rule, you cannot deduct the $100 you paid as the deductible. H&r block tax estimator When you receive the $850 from the insurance company in 2014, do not report it as income. H&r block tax estimator Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. H&r block tax estimator The deduction for casualty and theft losses of employee property and personal-use property is limited. H&r block tax estimator A loss on employee property is subject to the 2% rule, discussed next. H&r block tax estimator With certain exceptions, a loss on property you own for your personal use is subject to the $100 and 10% rules, discussed later. H&r block tax estimator The 2%, $100, and 10% rules are also summarized in Table 2 . H&r block tax estimator Losses on business property (other than employee property) and income-producing property are not subject to these rules. H&r block tax estimator However, if your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. H&r block tax estimator See the Instructions for Form 4684, Section B. H&r block tax estimator If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. H&r block tax estimator 2% Rule The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040) or Form 1040NR, Schedule A, must be reduced by 2% of your adjusted gross income. H&r block tax estimator Employee property is property used in performing services as an employee. H&r block tax estimator $100 Rule After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce that loss by $100. H&r block tax estimator This reduction applies to each total casualty or theft loss. H&r block tax estimator It does not matter how many pieces of property are involved in an event. H&r block tax estimator Only a single $100 reduction applies. H&r block tax estimator Example. H&r block tax estimator You have $750 deductible collision insurance on your car. H&r block tax estimator The car is damaged in a collision. H&r block tax estimator The insurance company pays you for the damage minus the $750 deductible. H&r block tax estimator The amount of the casualty loss is based solely on the deductible. H&r block tax estimator The casualty loss is $650 ($750 − $100) because the first $100 of a casualty loss on personal-use property is not deductible. H&r block tax estimator Single event. H&r block tax estimator   Generally, events closely related in origin cause a single casualty. H&r block tax estimator It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. H&r block tax estimator A single casualty may also damage two or more pieces of property, such as a hailstorm that damages both your home and your car parked in your driveway. H&r block tax estimator Example 1. H&r block tax estimator A thunderstorm destroyed your pleasure boat. H&r block tax estimator You also lost some boating equipment in the storm. H&r block tax estimator Your loss was $5,000 on the boat and $1,200 on the equipment. H&r block tax estimator Your insurance company reimbursed you $4,500 for the damage to your boat. H&r block tax estimator You had no insurance coverage on the equipment. H&r block tax estimator Your casualty loss is from a single event and the $100 rule applies once. H&r block tax estimator Figure your loss before applying the 10% rule (discussed later) as follows. H&r block tax estimator     Boat Equipment 1. H&r block tax estimator Loss $5,000 $1,200 2. H&r block tax estimator Subtract insurance 4,500 -0- 3. H&r block tax estimator Loss after reimbursement $ 500 $1,200 4. H&r block tax estimator Total loss $1,700 5. H&r block tax estimator Subtract $100 100 6. H&r block tax estimator Loss before 10% rule $1,600 Example 2. H&r block tax estimator Thieves broke into your home in January and stole a ring and a fur coat. H&r block tax estimator You had a loss of $200 on the ring and $700 on the coat. H&r block tax estimator This is a single theft. H&r block tax estimator The $100 rule applies to the total $900 loss. H&r block tax estimator Example 3. H&r block tax estimator In September, hurricane winds blew the roof off your home. H&r block tax estimator Flood waters caused by the hurricane further damaged your home and destroyed your furniture and personal car. H&r block tax estimator This is considered a single casualty. H&r block tax estimator The $100 rule is applied to your total loss from the flood waters and the wind. H&r block tax estimator More than one loss. H&r block tax estimator   If you have more than one casualty or theft loss during your tax year, you must reduce each loss by $100. H&r block tax estimator Example. H&r block tax estimator Your family car was damaged in an accident in January. H&r block tax estimator Your loss after the insurance reimbursement was $75. H&r block tax estimator In February, your car was damaged in another accident. H&r block tax estimator This time your loss after the insurance reimbursement was $90. H&r block tax estimator Apply the $100 rule to each separate casualty loss. H&r block tax estimator Since neither accident resulted in a loss of over $100, you are not entitled to any deduction for these accidents. H&r block tax estimator More than one person. H&r block tax estimator   If two or more individuals (other than a husband and wife filing a joint return) have losses from the same casualty or theft, the $100 rule applies separately to each individual. H&r block tax estimator Example. H&r block tax estimator A fire damaged your house and also damaged the personal property of your house guest. H&r block tax estimator You must reduce your loss by $100. H&r block tax estimator Your house guest must reduce his or her loss by $100. H&r block tax estimator Married taxpayers. H&r block tax estimator   If you and your spouse file a joint return, you are treated as one individual in applying the $100 rule. H&r block tax estimator It does not matter whether you own the property jointly or separately. H&r block tax estimator   If you and your spouse have a casualty or theft loss and you file separate returns, each of you must reduce your loss by $100. H&r block tax estimator This is true even if you own the property jointly. H&r block tax estimator If one spouse owns the property, only that spouse can figure a loss deduction on a separate return. H&r block tax estimator   If the casualty or theft loss is on property you own as tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. H&r block tax estimator Neither of you can figure your deduction on the entire loss on a separate return. H&r block tax estimator Each of you must reduce the loss by $100. H&r block tax estimator More than one owner. H&r block tax estimator   If two or more individuals (other than a husband and wife filing a joint return) have a loss on property jointly owned, the $100 rule applies separately to each. H&r block tax estimator For example, if two sisters live together in a home they own jointly and they have a casualty loss on the home, the $100 rule applies separately to each sister. H&r block tax estimator 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. H&r block tax estimator Apply this rule after you reduce each loss by $100. H&r block tax estimator For more information, see the Form 4684 instructions. H&r block tax estimator If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. H&r block tax estimator Example. H&r block tax estimator In June, you discovered that your house had been burglarized. H&r block tax estimator Your loss after insurance reimbursement was $2,000. H&r block tax estimator Your adjusted gross income for the year you discovered the theft is $29,500. H&r block tax estimator Figure your theft loss as follows. H&r block tax estimator 1. H&r block tax estimator Loss after insurance $2,000 2. H&r block tax estimator Subtract $100 100 3. H&r block tax estimator Loss after $100 rule $1,900 4. H&r block tax estimator Subtract 10% of $29,500 AGI $2,950 5. H&r block tax estimator Theft loss deduction $-0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($2,950). H&r block tax estimator More than one loss. H&r block tax estimator   If you have more than one casualty or theft loss during your tax year, reduce each loss by any reimbursement and by $100. H&r block tax estimator Then you must reduce the total of all your losses by 10% of your adjusted gross income. H&r block tax estimator Example. H&r block tax estimator In March, you had a car accident that totally destroyed your car. H&r block tax estimator You did not have collision insurance on your car, so you did not receive any insurance reimbursement. H&r block tax estimator Your loss on the car was $1,800. H&r block tax estimator In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items you had stored there. H&r block tax estimator Your loss on the basement items after reimbursement was $2,100. H&r block tax estimator Your adjusted gross income for the year that the accident and fire occurred is $25,000. H&r block tax estimator You figure your casualty loss deduction as follows. H&r block tax estimator     Car Basement 1. H&r block tax estimator Loss $1,800 $2,100 2. H&r block tax estimator Subtract $100 per incident 100 100 3. H&r block tax estimator Loss after $100 rule $1,700 $2,000 4. H&r block tax estimator Total loss $3,700 5. H&r block tax estimator Subtract 10% of $25,000 AGI 2,500 6. H&r block tax estimator Casualty loss deduction $1,200 Married taxpayers. H&r block tax estimator   If you and your spouse file a joint return, you are treated as one individual in applying the 10% rule. H&r block tax estimator It does not matter if you own the property jointly or separately. H&r block tax estimator   If you file separate returns, the 10% rule applies to each return on which a loss is claimed. H&r block tax estimator More than one owner. H&r block tax estimator   If two or more individuals (other than husband and wife filing a joint return) have a loss on property that is owned jointly, the 10% rule applies separately to each. H&r block tax estimator Gains and losses. H&r block tax estimator   If you have casualty or theft gains as well as losses to personal-use property, you must compare your total gains to your total losses. H&r block tax estimator Do this after you have reduced each loss by any reimbursements and by $100 but before you have reduced the losses by 10% of your adjusted gross income. H&r block tax estimator Casualty or theft gains do not include gains you choose to postpone. H&r block tax estimator See Postponement of Gain, later. H&r block tax estimator Losses more than gains. H&r block tax estimator   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. H&r block tax estimator The rest, if any, is your deductible loss from personal-use property. H&r block tax estimator Example. H&r block tax estimator Your theft loss after reducing it by reimbursements and by $100 is $2,700. H&r block tax estimator Your casualty gain is $700. H&r block tax estimator Your loss is more than your gain, so you must reduce your $2,000 net loss ($2,700 − $700) by 10% of your adjusted gross income. H&r block tax estimator Gains more than losses. H&r block tax estimator   If your recognized gains are more than your losses, subtract your losses from your gains. H&r block tax estimator The difference is treated as a capital gain and must be reported on Schedule D (Form 1040). H&r block tax estimator The 10% rule does not apply to your gains. H&r block tax estimator Example. H&r block tax estimator Your theft loss is $600 after reducing it by reimbursements and by $100. H&r block tax estimator Your casualty gain is $1,600. H&r block tax estimator Because your gain is more than your loss, you must report the $1,000 net gain ($1,600 − $600) on Schedule D (Form 1040). H&r block tax estimator More information. H&r block tax estimator   For information on how to figure recognized gains, see Figuring a Gain , later. H&r block tax estimator Figuring the Deduction Generally, you must figure your loss separately for each item stolen, damaged, or destroyed. H&r block tax estimator However, a special rule applies to real property you own for personal use. H&r block tax estimator Real property. H&r block tax estimator   In figuring a loss to real estate you own for personal use, all improvements (such as buildings and ornamental trees and the land containing the improvements) are considered together. H&r block tax estimator Example 1. H&r block tax estimator In June, a fire destroyed your lakeside cottage, which cost $144,800 (including $14,500 for the land) several years ago. H&r block tax estimator (Your land was not damaged. H&r block tax estimator ) This was your only casualty or theft loss for the year. H&r block tax estimator The FMV of the property immediately before the fire was $180,000 ($145,000 for the cottage and $35,000 for the land). H&r block tax estimator The FMV immediately after the fire was $35,000 (value of the land). H&r block tax estimator You collected $130,000 from the insurance company. H&r block tax estimator Your adjusted gross income for the year the fire occurred is $80,000. H&r block tax estimator Your deduction for the casualty loss is $6,700, figured in the following manner. H&r block tax estimator 1. H&r block tax estimator Adjusted basis of the entire property (cost in this example) $144,800 2. H&r block tax estimator FMV of entire property  before fire $180,000 3. H&r block tax estimator FMV of entire property after fire 35,000 4. H&r block tax estimator Decrease in FMV of entire property (line 2 − line 3) $145,000 5. H&r block tax estimator Loss (smaller of line 1 or line 4) $144,800 6. H&r block tax estimator Subtract insurance 130,000 7. H&r block tax estimator Loss after reimbursement $14,800 8. H&r block tax estimator Subtract $100 100 9. H&r block tax estimator Loss after $100 rule $14,700 10. H&r block tax estimator Subtract 10% of $80,000 AGI 8,000 11. H&r block tax estimator Casualty loss deduction $ 6,700 Example 2. H&r block tax estimator You bought your home a few years ago. H&r block tax estimator You paid $150,000 ($10,000 for the land and $140,000 for the house). H&r block tax estimator You also spent an additional $2,000 for landscaping. H&r block tax estimator This year a fire destroyed your home. H&r block tax estimator The fire also damaged the shrubbery and trees in your yard. H&r block tax estimator The fire was your only casualty or theft loss this year. H&r block tax estimator Competent appraisers valued the property as a whole at $175,000 before the fire, but only $50,000 after the fire. H&r block tax estimator Shortly after the fire, the insurance company paid you $95,000 for the loss. H&r block tax estimator Your adjusted gross income for this year is $70,000. H&r block tax estimator You figure your casualty loss deduction as follows. H&r block tax estimator 1. H&r block tax estimator Adjusted basis of the entire property (cost of land, building, and landscaping) $152,000 2. H&r block tax estimator FMV of entire property  before fire $175,000 3. H&r block tax estimator FMV of entire property after fire 50,000 4. H&r block tax estimator Decrease in FMV of entire property (line 2 − line 3) $125,000 5. H&r block tax estimator Loss (smaller of line 1 or line 4) $125,000 6. H&r block tax estimator Subtract insurance 95,000 7. H&r block tax estimator Loss after reimbursement $30,000 8. H&r block tax estimator Subtract $100 100 9. H&r block tax estimator Loss after $100 rule $29,900 10. H&r block tax estimator Subtract 10% of $70,000 AGI 7,000 11. H&r block tax estimator Casualty loss deduction $ 22,900 Personal property. H&r block tax estimator   Personal property is any property that is not real property. H&r block tax estimator If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. H&r block tax estimator Then combine these separate losses to figure the total loss. H&r block tax estimator Reduce the total loss by $100 and 10% of your adjusted gross income to figure the loss deduction. H&r block tax estimator Example 1. H&r block tax estimator In August, a storm destroyed your pleasure boat, which cost $18,500. H&r block tax estimator This was your only casualty or theft loss for the year. H&r block tax estimator Its FMV immediately before the storm was $17,000. H&r block tax estimator You had no insurance, but were able to salvage the motor of the boat and sell it for $200. H&r block tax estimator Your adjusted gross income for the year the casualty occurred is $70,000. H&r block tax estimator Although the motor was sold separately, it is part of the boat and not a separate item of property. H&r block tax estimator You figure your casualty loss deduction as follows. H&r block tax estimator 1. H&r block tax estimator Adjusted basis (cost in this example) $18,500 2. H&r block tax estimator FMV before storm $17,000 3. H&r block tax estimator FMV after storm 200 4. H&r block tax estimator Decrease in FMV  (line 2 − line 3) $16,800 5. H&r block tax estimator Loss (smaller of line 1 or line 4) $16,800 6. H&r block tax estimator Subtract insurance -0- 7. H&r block tax estimator Loss after reimbursement $16,800 8. H&r block tax estimator Subtract $100 100 9. H&r block tax estimator Loss after $100 rule $16,700 10. H&r block tax estimator Subtract 10% of $70,000 AGI 7,000 11. H&r block tax estimator Casualty loss deduction $ 9,700 Example 2. H&r block tax estimator In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. H&r block tax estimator You had bought the car for $30,000. H&r block tax estimator The FMV of the car just before the accident was $17,500. H&r block tax estimator Its FMV just after the accident was $180 (scrap value). H&r block tax estimator Your insurance company reimbursed you $16,000. H&r block tax estimator Your watch was not insured. H&r block tax estimator You had purchased it for $250. H&r block tax estimator Its FMV just before the accident was $500. H&r block tax estimator Your adjusted gross income for the year the accident occurred is $97,000. H&r block tax estimator Your casualty loss deduction is zero, figured as follows. H&r block tax estimator     Car Watch 1. H&r block tax estimator Adjusted basis (cost) $30,000 $250 2. H&r block tax estimator FMV before accident $17,500 $500 3. H&r block tax estimator FMV after accident 180 -0- 4. H&r block tax estimator Decrease in FMV (line 2 − line 3) $17,320 $500 5. H&r block tax estimator Loss (smaller of line 1 or line 4) $17,320 $250 6. H&r block tax estimator Subtract insurance 16,000 -0- 7. H&r block tax estimator Loss after reimbursement $1,320 $250 8. H&r block tax estimator Total loss $1,570 9. H&r block tax estimator Subtract $100 100 10. H&r block tax estimator Loss after $100 rule $1,470 11. H&r block tax estimator Subtract 10% of $97,000 AGI 9,700 12. H&r block tax estimator Casualty loss deduction $ -0- Both real and personal properties. H&r block tax estimator   When a casualty involves both real and personal properties, you must figure the loss separately for each type of property. H&r block tax estimator However, you apply a single $100 reduction to the total loss. H&r block tax estimator Then, you apply the 10% rule to figure the casualty loss deduction. H&r block tax estimator Example. H&r block tax estimator In July, a hurricane damaged your home, which cost you $164,000 including land. H&r block tax estimator The FMV of the property (both building and land) immediately before the storm was $170,000 and its FMV immediately after the storm was $100,000. H&r block tax estimator Your household furnishings were also damaged. H&r block tax estimator You separately figured the loss on each damaged household item and arrived at a total loss of $600. H&r block tax estimator You collected $50,000 from the insurance company for the damage to your home, but your household furnishings were not insured. H&r block tax estimator Your adjusted gross income for the year the hurricane occurred is $65,000. H&r block tax estimator You figure your casualty loss deduction from the hurricane in the following manner. H&r block tax estimator 1. H&r block tax estimator Adjusted basis of real property (cost in this example) $164,000 2. H&r block tax estimator FMV of real property before hurricane $170,000 3. H&r block tax estimator FMV of real property after hurricane 100,000 4. H&r block tax estimator Decrease in FMV of real property (line 2 − line 3) $70,000 5. H&r block tax estimator Loss on real property (smaller of line 1 or line 4) $70,000 6. H&r block tax estimator Subtract insurance 50,000 7. H&r block tax estimator Loss on real property after reimbursement $20,000 8. H&r block tax estimator Loss on furnishings $600 9. H&r block tax estimator Subtract insurance -0- 10. H&r block tax estimator Loss on furnishings after reimbursement $600 11. H&r block tax estimator Total loss (line 7 plus line 10) $20,600 12. H&r block tax estimator Subtract $100 100 13. H&r block tax estimator Loss after $100 rule $20,500 14. H&r block tax estimator Subtract 10% of $65,000 AGI 6,500 15. H&r block tax estimator Casualty loss deduction $14,000 Property used partly for business and partly for personal purposes. H&r block tax estimator   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use portion and for the business or income-producing portion. H&r block tax estimator You must figure each loss separately because the losses attributed to these two uses are figured in two different ways. H&r block tax estimator When figuring each loss, allocate the total cost or basis, the FMV before and after the casualty or theft loss, and the insurance or other reimbursement between the business and personal use of the property. H&r block tax estimator The $100 rule and the 10% rule apply only to the casualty or theft loss on the personal-use portion of the property. H&r block tax estimator Example. H&r block tax estimator You own a building that you constructed on leased land. H&r block tax estimator You use half of the building for your business and you live in the other half. H&r block tax estimator The cost of the building was $400,000. H&r block tax estimator You made no further improvements or additions to it. H&r block tax estimator A flood in March damaged the entire building. H&r block tax estimator The FMV of the building was $380,000 immediately before the flood and $320,000 afterwards. H&r block tax estimator Your insurance company reimbursed you $40,000 for the flood damage. H&r block tax estimator Depreciation on the business part of the building before the flood totaled $24,000. H&r block tax estimator Your adjusted gross income for the year the flood occurred is $125,000. H&r block tax estimator You have a deductible business casualty loss of $10,000. H&r block tax estimator You do not have a deductible personal casualty loss because of the 10% rule. H&r block tax estimator You figure your loss as follows. H&r block tax estimator     Business   Personal     Part   Part 1. H&r block tax estimator Cost (total $400,000) $200,000   $200,000 2. H&r block tax estimator Subtract depreciation 24,000   -0- 3. H&r block tax estimator Adjusted basis $176,000   $200,000 4. H&r block tax estimator FMV before flood (total $380,000) $190,000   $190,000 5. H&r block tax estimator FMV after flood (total $320,000) 160,000   160,000 6. H&r block tax estimator Decrease in FMV  (line 4 − line 5) $30,000   $30,000 7. H&r block tax estimator Loss (smaller of line 3 or line 6) $30,000   $30,000 8. H&r block tax estimator Subtract insurance 20,000   20,000 9. H&r block tax estimator Loss after reimbursement $10,000   $10,000 10. H&r block tax estimator Subtract $100 on personal-use property -0-   100 11. H&r block tax estimator Loss after $100 rule $10,000   $9,900 12. H&r block tax estimator Subtract 10% of $125,000 AGI on personal-use property -0-   12,500 13. H&r block tax estimator Deductible business loss $10,000     14. H&r block tax estimator Deductible personal loss $-0- Figuring a Gain If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. H&r block tax estimator Your gain is figured as follows. H&r block tax estimator The amount you receive (discussed next), minus Your adjusted basis in the property at the time of the casualty or theft. H&r block tax estimator See Adjusted Basis , earlier, for information on adjusted basis. H&r block tax estimator Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. H&r block tax estimator Amount you receive. H&r block tax estimator   The amount you receive includes any money plus the value of any property you receive minus any expenses you have in obtaining reimbursement. H&r block tax estimator It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. H&r block tax estimator Example. H&r block tax estimator A hurricane destroyed your personal residence and the insurance company awarded you $145,000. H&r block tax estimator You received $140,000 in cash. H&r block tax estimator The remaining $5,000 was paid directly to the holder of a mortgage on the property. H&r block tax estimator The amount you received includes the $5,000 reimbursement paid on the mortgage. H&r block tax estimator Main home destroyed. H&r block tax estimator   If you have a gain because your main home was destroyed, you generally can exclude the gain from your income as if you had sold or exchanged your home. H&r block tax estimator You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). H&r block tax estimator To exclude a gain, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date it was destroyed. H&r block tax estimator For information on this exclusion, see Publication 523. H&r block tax estimator If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. H&r block tax estimator See Postponement of Gain , later. H&r block tax estimator Reporting a gain. H&r block tax estimator   You generally must report your gain as income in the year you receive the reimbursement. H&r block tax estimator However, you do not have to report your gain if you meet certain requirements and choose to postpone reporting the gain according to the rules explained under Postponement of Gain, next. H&r block tax estimator   For information on how to report a gain, see How To Report Gains and Losses , later. H&r block tax estimator    If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, do not consider the gain you are postponing when figuring your casualty or theft loss deduction. H&r block tax estimator See 10% Rule under Deduction Limits, earlier. H&r block tax estimator Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. H&r block tax estimator Your basis in the new property is generally the same as your adjusted basis in the property it replaces. H&r block tax estimator You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. H&r block tax estimator However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. H&r block tax estimator You also can choose to postpone reporting the gain if you purchase a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the property. H&r block tax estimator See Controlling interest in a corporation , later. H&r block tax estimator If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. H&r block tax estimator To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. H&r block tax estimator If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. H&r block tax estimator Example. H&r block tax estimator In 1970, you bought an oceanfront cottage for your personal use at a cost of $18,000. H&r block tax estimator You made no further improvements or additions to it. H&r block tax estimator When a storm destroyed the cottage this January, the cottage was worth $250,000. H&r block tax estimator You received $146,000 from the insurance company in March. H&r block tax estimator You had a gain of $128,000 ($146,000 − $18,000). H&r block tax estimator You spent $144,000 to rebuild the cottage. H&r block tax estimator Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. H&r block tax estimator Buying replacement property from a related person. H&r block tax estimator   You cannot postpone reporting a gain from a casualty or theft if you buy the replacement property from a related person (discussed later). H&r block tax estimator This rule applies to the following taxpayers. H&r block tax estimator C corporations. H&r block tax estimator Partnerships in which more than 50% of the capital or profits interests is owned by C corporations. H&r block tax estimator All others (including individuals, partnerships — other than those in (2) — and S corporations) if the total realized gain for the tax year on all destroyed or stolen properties on which there are realized gains is more than $100,000. H&r block tax estimator For casualties and thefts described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. H&r block tax estimator If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. H&r block tax estimator If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. H&r block tax estimator Exception. H&r block tax estimator   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the destroyed or stolen property. H&r block tax estimator Related persons. H&r block tax estimator   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. H&r block tax estimator For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. H&r block tax estimator Death of a taxpayer. H&r block tax estimator   If a taxpayer dies after having a gain but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. H&r block tax estimator The executor of the estate or the person succeeding to the funds from the casualty or theft cannot postpone reporting the gain by buying replacement property. H&r block tax estimator Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. H&r block tax estimator Property you acquire as a gift or inheritance does not qualify. H&r block tax estimator You do not have to use the same funds you receive as

The H&r Block Tax Estimator

H&r block tax estimator Index A Abandonment of home, Abandonment. H&r block tax estimator Absence, temporary, Temporary absence. H&r block tax estimator Abstract fees, Settlement fees or closing costs. H&r block tax estimator Address, change of, Reminders Adjusted basis, Adjusted Basis, Adjusted Basis Definition of, Determining Basis Worksheet 1 to figure, Determining Basis, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 3 for Emily White, Worksheet 1 Instructions. H&r block tax estimator Adjusted Basis of Home Sold Adoption Adjusted basis of home for credit claimed, Decreases to Basis Advertising fees, Selling expenses. H&r block tax estimator Amount realized, Amount Realized Appraisal fees, Settlement fees or closing costs. H&r block tax estimator Architect's fees, Construction. H&r block tax estimator Armed forces Ownership and use tests, Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. H&r block tax estimator Assistance (see Tax help) B Back interest, Settlement fees or closing costs. H&r block tax estimator Basis Adjusted basis (see Adjusted basis) Determination of, Determining Basis, Adjusted Basis Other than cost, Basis Other Than Cost Building permit fees, Construction. H&r block tax estimator Business use of home, Business Use or Rental of Home, Use test met for business part (with no business use in year of sale). H&r block tax estimator C Casualties Amounts spent after to restore damaged property, Increases to Basis Deductible casualty losses, Decreases to Basis Disaster as cause of, Specific event safe harbors. H&r block tax estimator Insurance payments for casualty losses, Decreases to Basis Change of address, Reminders Closing costs, Settlement fees or closing costs. H&r block tax estimator Commissions, Selling expenses. H&r block tax estimator , Settlement fees or closing costs. H&r block tax estimator Community property Basis determination, Community property. H&r block tax estimator Condemnation Gain exclusion, Home destroyed or condemned. H&r block tax estimator Ownership and use test when previous home condemned, Previous home destroyed or condemned. H&r block tax estimator Condominiums As main home, Main Home Basis determination, Condominium. H&r block tax estimator Construction costs, Construction. H&r block tax estimator Built by you, Built by you. H&r block tax estimator Cooperative apartments As main home, Main Home Basis determination, Cooperative apartment. H&r block tax estimator Ownership and use tests, Cooperative apartment. H&r block tax estimator Cost as basis, Cost As Basis Credit reports Cost of obtaining, Settlement fees or closing costs. H&r block tax estimator D Date of sale, Date of sale. H&r block tax estimator Death Sale due to, Specific event safe harbors. H&r block tax estimator Spouse's death before sale, ownership and use tests, Sale of main home by surviving spouse. H&r block tax estimator Decreases to basis, Decreases to Basis Depreciation After May 6, 1997, Depreciation after May 6, 1997. H&r block tax estimator Home used for business or rental purposes, Decreases to Basis Destroyed homes Gain exclusion, Home destroyed or condemned. H&r block tax estimator Ownership and use test when previous home destroyed, Previous home destroyed or condemned. H&r block tax estimator Disabilities, individuals with Ownership and use test, Exception for individuals with a disability. H&r block tax estimator Disasters, Specific event safe harbors. H&r block tax estimator Discharge of qualified principal residence indebtedness, Adjusted Basis Divorce Home received from spouse, Home received from spouse. H&r block tax estimator Home transferred to spouse, Transfer to spouse. H&r block tax estimator Ownership and use tests, Home transferred from spouse. H&r block tax estimator Sale due to, Specific event safe harbors. H&r block tax estimator Transfers after July 18, 1984, Transfers after July 18, 1984. H&r block tax estimator Transfers before July 19, 1984, Transfers before July 19, 1984. H&r block tax estimator Use of home after divorce, Use of home after divorce. H&r block tax estimator Doctor's recommendation for sale, Doctor's recommendation safe harbor. H&r block tax estimator E Easements, Decreases to Basis Employee of the intelligence community, Employee of the intelligence community. H&r block tax estimator Employment Change in place of employment, Change in Place of Employment Payment by employer, when job transfer involved, Payment by employer. H&r block tax estimator Energy Conservation subsidies, Decreases to Basis Credit, Decreases to Basis Exclusion of gain, Excluding the Gain, Nonqualified Use Reduced maximum exclusion, Reduced Maximum Exclusion Expatriates, Expatriates. H&r block tax estimator F Federal mortgage subsidies Recapture of, Recapturing (Paying Back) a Federal Mortgage Subsidy Figuring gain or loss, Figuring Gain or Loss, More information. H&r block tax estimator Fire insurance premiums, Settlement fees or closing costs. H&r block tax estimator Foreclosure, Foreclosure or repossession. H&r block tax estimator Foreign Service, Foreign Service member. H&r block tax estimator Ownership and use tests, Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. H&r block tax estimator Form 1040 Reporting sale of home, Reporting the Sale Seller-financed mortgages, Seller-financed mortgage. H&r block tax estimator Form 1040, Schedule A Real estate taxes, Real estate taxes. H&r block tax estimator Form 1040, Schedule D Reporting sale of home, Reporting the Sale Form 1099-S Proceeds from real estate transactions, Date of sale. H&r block tax estimator , Form 1099-S. H&r block tax estimator , Form 1099-S. H&r block tax estimator Form 2119 Sale of home, Adjusted Basis Form 6252 Installment sale income, Installment sale. H&r block tax estimator Form 8828 Recapture tax, How to figure and report the recapture. H&r block tax estimator Form 8960 Net Investment Income Tax, Net Investment Income Tax (NIIT). H&r block tax estimator NIIT, Net Investment Income Tax (NIIT). H&r block tax estimator Form 982 Discharge of indebtedness, Adjusted Basis Free tax services, Free help with your tax return. H&r block tax estimator Future developments, Future Developments G Gain or loss Basis determination, Determining Basis, Adjusted Basis Exclusion of gain, Excluding the Gain Exclusion of gain, nonqualified use, Nonqualified Use Gain on sale, Gain on sale. H&r block tax estimator Loss on sale, Loss on sale. H&r block tax estimator Postponed from sale of previous home before May 7, 1997, Decreases to Basis Worksheet 2 to figure, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Completed Example 1 for Amy, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Illustrated Example 2 for Peter and Betty Clark, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home Gifts Home received as, Home received as gift. H&r block tax estimator H Health Sale of home due to, Health Help (see Tax help) Homebuyer credit Recapture, Recapture of the post-2008 first-time homebuyer credit. H&r block tax estimator Houseboats As main home, Main Home I Important reminders Change of address, Reminders Home sold with undeducted points, Reminders Improvements Adjusted basis determination, Improvements. H&r block tax estimator Charges for, Settlement fees or closing costs. H&r block tax estimator Receipts and other records, Adjusted Basis Useful life of more than 1 year, Increases to Basis Increases to basis, Increases to Basis Individual taxpayer identification numbers (ITINs), Individual taxpayer identification number (ITIN). H&r block tax estimator Inheritance Home received as, Home acquired from a decedent who died before or after 2010. H&r block tax estimator Installment sales, Installment sale. H&r block tax estimator Involuntary conversion, Specific event safe harbors. H&r block tax estimator ITINs (Individual taxpayer identification numbers), Individual taxpayer identification number (ITIN). H&r block tax estimator J Joint owners not married, Joint owners not married. H&r block tax estimator Joint returns, Jointly owned home. H&r block tax estimator Ownership and use tests, Married Persons L Land Sale of land on which home located, Land. H&r block tax estimator Sale of vacant land, Vacant land. H&r block tax estimator Legal fees, Selling expenses. H&r block tax estimator , Settlement fees or closing costs. H&r block tax estimator , Construction. H&r block tax estimator Legal separation Sale due to, Specific event safe harbors. H&r block tax estimator Like-kind exchange, Sale of home acquired in a like-kind exchange. H&r block tax estimator Living expenses, Reasonable basic living expenses. H&r block tax estimator Loan assumption fees, Settlement fees or closing costs. H&r block tax estimator Loan placement fees, Selling expenses. H&r block tax estimator Loss (see Gain or loss) M Main home Defined, Main Home Factors used to determine, Factors used to determine main home. H&r block tax estimator Property used partly as, Property used partly as your main home. H&r block tax estimator , Property Used Partly for Business or Rental Married taxpayers (see Joint returns) Maximum exclusion, Maximum Exclusion Reduced, Reduced Maximum Exclusion Military (see Armed forces) Missing children, photographs of, Reminders Mobile homes As main home, Main Home More than one home, More than one home. H&r block tax estimator Mortgage fees, Settlement fees or closing costs. H&r block tax estimator Mortgage insurance premiums, Settlement fees or closing costs. H&r block tax estimator Mortgage subsidies Recapturing (paying back) federal mortgage subsidy, Recapturing (Paying Back) a Federal Mortgage Subsidy Mortgages, seller-financed, Seller-financed mortgage. H&r block tax estimator Moving expense, Settlement fees or closing costs. H&r block tax estimator Multiple births Sale due to, Specific event safe harbors. H&r block tax estimator N Nonqualified use, Nonqualified Use Nonresident aliens Spouse as, transfer of home to, Exception. H&r block tax estimator O Option to buy home, Option to buy. H&r block tax estimator Ownership and use tests, Ownership and Use Tests, Ownership and use tests met at different times. H&r block tax estimator P Partly used for business, Property Used Partly for Business or Rental Personal property Selling price of home not to include, Personal property. H&r block tax estimator Points, Selling expenses. H&r block tax estimator Home sold with undeducted points, Reminders Seller-paid, Seller-paid points. H&r block tax estimator Publications (see Tax help) R Real estate taxes, Settlement fees or closing costs. H&r block tax estimator , Real estate taxes. H&r block tax estimator Deducting in year of sale, Deducting Taxes in the Year of Sale Recapture of federal mortgage subsidy, Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of first-time homebuyer credit, Recapture of First-Time Homebuyer Credit Recording fees, Settlement fees or closing costs. H&r block tax estimator Recordkeeping, Adjusted Basis Reduced maximum exclusion, Reduced Maximum Exclusion Worksheet 3, Worksheet 3. H&r block tax estimator Reduced Maximum Exclusion Refinancing, Settlement fees or closing costs. H&r block tax estimator Relatives Sale of home to, Exception for sales to related persons. H&r block tax estimator Remainder interest Sale of, Sale of remainder interest. H&r block tax estimator Remodeling, Improvements. H&r block tax estimator , Exception. H&r block tax estimator (see also Improvements) Rental of home, Business Use or Rental of Home, Use test met for business part (with no business use in year of sale). H&r block tax estimator Before closing, by buyer, Settlement fees or closing costs. H&r block tax estimator Partial use, Property Used Partly for Business or Rental Repairs, Settlement fees or closing costs. H&r block tax estimator , Improvements. H&r block tax estimator , Repairs. H&r block tax estimator (see also Improvements) Reporting the sale, Reporting the Sale, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White Repossession, Foreclosure or repossession. H&r block tax estimator Right-of-ways, Decreases to Basis S Safe harbors Distance safe harbor, Distance safe harbor. H&r block tax estimator Doctor's recommendation for sale, Doctor's recommendation safe harbor. H&r block tax estimator Unforeseeable events, Specific event safe harbors. H&r block tax estimator Sales commissions, Selling expenses. H&r block tax estimator , Settlement fees or closing costs. H&r block tax estimator Sales to related persons, Exception for sales to related persons. H&r block tax estimator Self-employed persons Change in status causing inability to pay basic expenses, Specific event safe harbors. H&r block tax estimator Seller-financed mortgages, Seller-financed mortgage. H&r block tax estimator Seller-paid points, Seller-paid points. H&r block tax estimator Selling expenses, Selling expenses. H&r block tax estimator Selling price, Selling Price Separate returns, Separate returns. H&r block tax estimator Settlement fees, Settlement fees or closing costs. H&r block tax estimator Spouse Death of (see Surviving spouse) Divorce, transfers subsequent to (see Divorce) Survey fees, Settlement fees or closing costs. H&r block tax estimator Surviving spouse Basis determination, Surviving spouse. H&r block tax estimator Ownership and use tests, Sale of main home by surviving spouse. H&r block tax estimator T Tax help, How To Get Tax Help Temporary absence, Temporary absence. H&r block tax estimator Temporary housing, Temporary housing. H&r block tax estimator Title insurance, Settlement fees or closing costs. H&r block tax estimator Title search fees, Settlement fees or closing costs. H&r block tax estimator Trading homes, Trading (exchanging) homes. H&r block tax estimator , Home received as trade. H&r block tax estimator Transfer taxes, Settlement fees or closing costs. H&r block tax estimator , Transfer taxes. H&r block tax estimator Transfer to spouse, Transfer to spouse. H&r block tax estimator After July 18, 1984, Transfers after July 18, 1984. H&r block tax estimator Before July 19, 1984, Transfers before July 19, 1984. H&r block tax estimator TTY/TDD information, How To Get Tax Help U Unemployment, Specific event safe harbors. H&r block tax estimator Unforeseen circumstances, Unforeseen Circumstances Uniformed services (see Armed forces) Use tests, Ownership and Use Tests, Ownership and use tests met at different times. H&r block tax estimator Utilities Charges for installing, Settlement fees or closing costs. H&r block tax estimator Charges related to occupancy of house before closing, Settlement fees or closing costs. H&r block tax estimator Energy conservation subsidy, Decreases to Basis Meter and connection charges for construction, Construction. H&r block tax estimator V Vacant land Sale of, Vacant land. H&r block tax estimator W Worksheets, Worksheets. H&r block tax estimator Adjusted basis (Worksheet 1), Determining Basis, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 3 for Emily White, Worksheet 1 Instructions. H&r block tax estimator Adjusted Basis of Home Sold Gain (or loss), exclusion, and taxable gain (Worksheet 2), Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Completed Example 1 for Amy, Worksheet 1. H&r block tax estimator Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Illustrated Example 2 for Peter and Betty Clark, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White, Worksheet 2. H&r block tax estimator Taxable Gain on Sale of Home Recordkeeping and, Adjusted Basis Reduced maximum exclusion (Worksheet 3), Worksheet 3. H&r block tax estimator Reduced Maximum Exclusion Prev  Up     Home   More Online Publications