[StBernard] IRS

Westley Annis westley at da-parish.com
Thu Sep 7 18:59:02 EDT 2006


In June of this year IRS released Revenue Procedure 2006-32 which provided
"safe harbor" rules regarding the calculation of the fair market values of
your contents and structure. Safe Harbor means that if you use this method
you will not be questioned for your values. Regarding the structure the IRS
gave 7 different indexes to use depending on your square footage and degree
to damage.

Regarding the contents the revenue procedure states to use replacement value
less 10% for each year of ownership. For example 2005 replacement values
are at 100% since they were acquired in 2005 and had no time to depreciate.
For 2004 items it will be valued at 90% of current replacement value using
10% depreciation. For 2003 items it will be valued at 80% of current
replacement value using 20% depreciation, so forth and so on. For 1996
items and earlier it is the current replacement value at 10% fair market
value using 90% depreciation.

After the fair market value is calculated using the above method you would
compare that value to your original cost and take the lower of those two
items, reduce the overall totals by your insurance proceeds and the
difference is your reportable loss.

I hope that helps. Take care and God bless.

Dan


Dan Johnson
Certified Public Accountant
257 W Causeway Approach
Mandeville, LA 70448
985-626-1102 Voice
985-727-0834 Fax
----- Original Message -----

> Does anyone know if there is a special percent to use when figuring how

> much

> fair market value before and after the storm?

>

> DFH






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