Return-Path: Sender: "Marvin Kaye" To: lml@lancaironline.net Date: Tue, 15 Mar 2005 13:24:10 -0500 Message-ID: X-Original-Return-Path: Received: from mta6.srv.hcvlny.cv.net ([167.206.4.201] verified) by logan.com (CommuniGate Pro SMTP 4.3c2) with ESMTP id 794525 for lml@lancaironline.net; Tue, 15 Mar 2005 12:20:37 -0500 Received-SPF: neutral receiver=logan.com; client-ip=167.206.4.201; envelope-from=barkerasset@earthlink.net Received: from OFFICE2004 (ool-44c6358d.dyn.optonline.net [68.198.53.141]) by mta6.srv.hcvlny.cv.net (iPlanet Messaging Server 5.2 HotFix 1.25 (built Mar 3 2004)) with SMTP id <0IDE0033BLDZNJ@mta6.srv.hcvlny.cv.net> for lml@lancaironline.net; Tue, 15 Mar 2005 12:18:00 -0500 (EST) X-Original-Date: Tue, 15 Mar 2005 12:17:58 -0500 From: Bob Barker Subject: Re: [LML] Re: IRS Question X-Original-To: Lancair Mailing List , Allan Scherr X-Original-Message-id: <002301c52982$ef8cda40$6401a8c0@OFFICE2004> MIME-version: 1.0 X-MIMEOLE: Produced By Microsoft MimeOLE V6.00.2900.2180 X-Mailer: Microsoft Outlook Express 6.00.2900.2180 Content-type: multipart/alternative; boundary="Boundary_(ID_MSZp/jVAEqeX+WRP4VSWEg)" X-Priority: 3 X-MSMail-priority: Normal References: This is a multi-part message in MIME format. --Boundary_(ID_MSZp/jVAEqeX+WRP4VSWEg) Content-type: text/plain; charset=iso-8859-1 Content-transfer-encoding: 7BIT I have some experience in IRS matters. Although I usually charge for advice, after all I am a professional, my comments are offered free to kindred souls. Highly principled readers may nevertheless pay fair value, which I consider to be something a bit less than 2 cents. Certified checks please. 1. Unless you are audited, anything goes. Cost of repair vs change in value and any other issue you can imagine are moot, unless you are audited. 2. Very few tax returns are audited, very few. But there are a few items that flag returns for review by someone whose responsibility is to decide whether this one should be audited or not. A casuallty loss of 20,000 is likely to raise that flag. 3. In person, full return audits are expensive and time consuming for the IRS. Such can be discounted in your case. However, there is a reasonable probability you will receive a request for documentation of loss on this specific item by mail, requesting a response by mail. Be prepared for it. If it does not come within 4 years you are home free. (you CPAs out there, I know fraud extends the liability period but that has no application to this case). 4. Advice. Take the deduction for what you think is fair. If there is a range that you think is fair, favor yourself. Save every piece of paper that might be relevent. I wouldn't bother with appraisers, but that's me. I do my own taxes. I have been fully audited in person four times. It's a stressful experience beforehand but to my delight I found each auditor to be reasonable. It sounds to me like you are entitled to a casualty loss deduction. Don't be intimidated into foregoing it. If the IRS audits you, and if they don't see it as you do, pay up and complain to your congressman. Like engine failure, it's unfair but thankfully very unlikely. Bob Barker --Boundary_(ID_MSZp/jVAEqeX+WRP4VSWEg) Content-type: text/html; charset=iso-8859-1 Content-transfer-encoding: 7BIT

I have some experience in IRS matters. Although I usually charge for advice, after all I am a professional, my comments are offered free to kindred souls. Highly principled readers may nevertheless pay fair value, which I consider to be something a bit less than 2 cents. Certified checks please.

1. Unless you are audited, anything goes. Cost of repair vs change in value and any other issue you can imagine are moot, unless you are audited.

2. Very few tax returns are audited, very few. But there are a few items that flag returns for review by someone whose responsibility is to decide whether this one should be audited or not. A casuallty loss of 20,000 is likely to raise that flag.

3. In person, full return audits are expensive and time consuming for the IRS. Such can be discounted in your case. However, there is a reasonable probability you will receive a request for documentation of loss on this specific item by mail, requesting a response by mail. Be prepared for it. If it does not come within 4 years you are home free. (you CPAs out there, I know fraud extends the liability period but that has no application to this case).

4. Advice. Take the deduction for what you think is fair. If there is a range that you think is fair, favor yourself. Save every piece of paper that might be relevent. I wouldn't bother with appraisers, but that's me.

I do my own taxes. I have been fully audited in person four times. It's a stressful experience beforehand but to my delight I found each auditor to be reasonable. It sounds to me like you are entitled to a casualty loss deduction. Don't be intimidated into foregoing it. If the IRS audits you, and if they don't see it as you do, pay up and complain to your congressman. Like engine failure, it's unfair but thankfully very unlikely.

Bob Barker

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