Casualty Losses

You figure the amount of your loss using the following steps. 1.Determine your cost or other basis in the property before the casualty or theft. 2.Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. (The decrease in FMV is the difference between the property's value immediately before and immediately after the casualty or theft.) 3.From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive