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Tax Law (Questions About Taxes)/2014 sale of our home damaged by Katrina


QUESTION: In 2014 we sold our Hurricane Katrina damaged home.  It was never rebuilt after the storm, and in 2014 the City of New Orleans sent us a court order to repair it or face fines and, if it was not repaired by a specific date, they would begin proceedings to take it.  So, we quickly found a third party (a contractor who was flipping houses) and sold the property for $47,000.00.
In 2005 we claimed a casualty loss on the house for our taxes.  It has been our primary home.
The cost basis was $228.00.00.  We received an insurance payment of $185.000.00.  The Fair market value before the casualty was $265,000.00.  The fair market value after the casualty was $40,000.  Since 2005 our expenses on the property have been property taxes (about 1,200.00/year) and maintenance - cutting the yard.
I received a 1099-S form showing the gross proceeds of the sale to be $47,000.00.
I am wondering, given the overall losses we experienced on the property - what forms I need to submit, whether there is an exclusion for the sale given the losses, and how I report the sale of this house on my tax forms - what line on 1040?
Thank you so very much for your assistance.

ANSWER: report on schedule d.

it is not your principal residence and you dont qualify for any exclusions from the sale (unless it was for sale the entire time)

did you get road home too? or just insurance...

sale price 47k

less basis is the original cost less insurance, plus costs to carry since you started to hold it for investment and not as your residence,  should be about zero gain or loss.

good luck and you owe me a bowl of gumbo or a pound of community blend :)


ye of the sliver by the river

---------- FOLLOW-UP ----------

QUESTION: Thanks for your response.  We did not receive Road Home, just insurance.  I'm understanding that the "costs to carry" would be property taxes and yard maintenance we paid while holding it to sell?  It looks like to file schedule D I'll need to complete form 8949, since this would be considered a long-term asset - right?
Who would have guessed that the ghosts from Hurricane Katrina would still be haunting us 10 years later?  I'll be glad to put this behind us.  I understand this is just a chat, not legal or tax advice.  Thanks for your helpfulness.  Seems like you've been to NOLA - we just finished the French Quarter Festival and Jazz Fest is coming up...

Yes 8949 rolls into schedule d.

I opened the Windsor court for the 1984 world's fair- was opening team sous chef.  Also worked for Susan Spicer (bayona) at her old restaurant in st. Charles (savoir faire)

Mom/dad moved the after I left and dad passed a few years ago. Mom still lives near Riverbend and Tulane

Won't make it down again till end of summer.

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

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