- Step 1: File With County For Property Tax Reassessment
- Step 2: Understand Insurance Payouts
- Step 3: Casualty Loss/Gain Calculator
- Step 5: Transfer Lower Property Tax Base to New Home
Gain/Loss on Sale of Property After Casualty Loss Calculator
Gain may be excluded if this was your primary residence for 2 out of the last 5 years. Up to $250,000 for Single Filers and $500,000 for Married Filing Jointly. You may also be able to defer the casualty gain if you buy a replacement property within 4 years.
Example 1 Continued
Scenario: John sells his property
Sale Price: $225,000
Adjusted Basis (Cost of Home plus improvements): $200,000
Casualty Loss from Step 3: $20,000
Calculation:
Sale Price ($225,000) – Adjusted Basis ($200,000) – Casualty Loss ($20,000) = $5,000 Gain
Important Consideration:
Gain may be excluded if this was your primary residence for 2 out of the last 5 years. Up to $250,000 for Single Filers and $500,000 for Married Filing Jointly.
Example 2 Continued
Scenario: Mary sells her property
Sale Price: $175,000
Adjusted Basis (Cost of Home plus improvements): $150,000
Casualty Loss from Step 3: $0
(There was a GAIN, not a LOSS)
Calculation:
Sale Price ($175,000) – Adjusted Basis ($150,000) – Casualty Loss ($0) = $25,000 Gain
Important Consideration:
Gain may be excluded if this was your primary residence for 2 out of the last 5 years. Up to $250,000 for Single Filers and $500,000 for Married Filing Jointly. You may also be able to defer the casualty gain of $20,000 (see Example 2 from Step 3) if you buy a replacement property within 4 years.