Assessing Landscape Tree Loss
Along with assessing structural damage to property caused by a storm or flood, property owners may need to calculate the loss of trees and other landscaping. The following factors help determine the value of the damaged trees and landscaping:
Decrease in fair market value is calculated in two ways: appraisals immediately before and after the casualty and deduction from the before- casualty fair market value of the costs of clean-up, repair, or replacement. Competent appraisals are the best proof of decrease in fair market value. Appraisal fees are deductible under expenses incurred to determine tax liability. Those fees are not part of the casualty loss.
- Decrease in the fair market value of the property as a result of the casualty.
- The adjusted basis in the property.
- The amount of insurance or other compensation received.
Cleanup, repair, and replacement costs on the damaged landscape may be used to measure the decrease in property value if:
Homeowners who sustain significant damage to landscape trees may wish to contact the IRS to determine what other methods are currently being used to evaluate tree value. If homeowners decide to pursue claims or deductions, they must prove that casualty loss was sustained due to the storm or flood and that the amounts claimed as loss are deductible. Such record-keeping also is important in substantiating any claims for loss recovery. Specifically, homeowners must be prepared to show:
- The repairs are necessary to restore the property to its condition before the casualty.
- The amount spent on repairs is not excessive.
- The replacement or repairs do no more than take care of the damage sustained.
- The value of the property after the repairs does not, as a result of the repairs, exceed the value of the property before the casualty.
- The nature of the casualty and when it occurred.
- That the loss was the direct result of the casualty.
- That the claimant is the owner of the property.
- The costs of property proven by purchase contracts, deeds, etc.
- Value before and after the casualty.
- The amount of insurance or other compensation received or recoverable.
- Photographs of the property before and after the damage help show the condition and value of the property prior to the casualty.
- Local newspaper articles complete with dates and the newspaper's name serve as evidence of the casualty and its time and location.
- Appraisals are the most desirable tools for establishing values before and after casualties.
- Keep receipts for repair and replacement for claims.