Your Loss In Diminished Value May Be Tax Deductible2008 Tax Info for Diminished Value Claims
Notice: Review this information with your tax advisor to see if you qualify for a $3,500.00 (average) tax deduction
By some estimates, 16 million consumers overlook $56,000,000,000 ($56 Billion) worth of “Casualty Loss” tax deductions every year.
While it is becoming increasing common for insurers in third party liability claim situations to pay for the diminished value of a claimant’s (victim) vehicle after repair, in many states insurers in first-party claims (your own insurer) deny coverage for DV based on specific policy contract language. They have effectively shielded themselves from paying for this portion of your loss by limiting their liability to the cost of repairs but it’s a loss you may bare nonetheless.
he good news for consumers is Diminished Value can be and oftentimes is claimed as a tax deduction.
The resale value of a vehicle with a damage history is oftentimes worth substantially less than a comparable vehicle with no damage history. That reduction in resale value is known as “Diminished Value.” which is often defined as that portion of a vehicle’s pre-loss value that has not been restored through the repair process.
2008 IRS Form 4684 Directions
“if your property is covered by insurance you must file a timely insurance claim, otherwise you can not deduct the loss as a casualty or theft loss. However, the part of the loss that is not covered by insurance is still tax deductible”
IRS Form 4684
How much value does a vehicle lose? Amounts vary depending upon numerous factors. Here are some recent examples of which Auto Damage Experts assisted consumers in determining their remaining losses in DV.
|2007 Toyota||$14,023 repair||$6,685 DV|
|2006 Nissan||$7,740 repair||$3,557 DV|
|2005 Chevy||$2,600 repair||$1,400 DV|
Additionally, you can deduct the professional fee cost you incur in obtaining a diminished value assessment-report.
In this difficult economic time, it’s imperative that you take full advantage of your rights under the current the tax codes. ACT TODAY!
Be sure to check with you tax advisor, as Auto Damage Experts does not offer legal or tax advice.