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Tax Law (Questions About Taxes)/Rental Real Estate LLC, report fire damage


My wife and I are partners in an LLC that owns two apartment buildings.  One of the buildings had a fire.  The fire damage has
been repaired, and the insurance company has reimbursed me for a certain percentage of the loss, including loss of rental income.

At this point I have:
   1) itemized the cost of cleaning to Form 8825, line 5 ("Cleaning and maintenance") -- treating cleaning up after the fire as a routine cleaning / maintenance cost,
   2) itemized the cost of repairs to 8825, line 10 ("Repairs"),
   3) itemized cost of housing tenants on line 15 ("Other Expenses")
   3) included the insurance company's reimbursements on 8825, line 1 ("Gross Rents.")

I have not bothered to use a Form 4684 (Casualty or theft worksheet), because the building is back to where it was before the fire, and determining the "fair market value" before and after (Form 4684, lines 24 & 25) seemed impossible.

I have lost money on the event, because the costs were higher than the reimbursements, but that information is contained in Form 1065, Line 1.

Is there any purpose in filling out Form 4684?




Thanks for your question.

Form 4684 is not appropriate in this situation as it is for personal casualty and theft losses.  This is a business loss.

Although it does not make any difference in the tax, you have mis-characterized your return.  The insurance reimbursement should be shown as such, not as rents.  The other items are ok as you have listed them, but I would show the cost of housing tenants as such and not just as other expenses.  You may have done this, but if the "other" category gets too big, that is a red flag to the IRS.  If you show it as "Tenant Housing Costs" or something similar under other expenses, that would be fine.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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