Tax Deductible

tax-deductable-300x200Your Loss In Diminished Value May Be Tax Deductible.

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 factual loss you may have nonetheless.

The good news for consumers is Diminished Value can oftentimes be 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 cannot 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”

How much value does a vehicle lose after a repaired wreck or collision? Amounts vary depending upon numerous factors. Vehicle Value Experts can provide you a detailed comprehensive study as to the fair market value before the wreck or collision opposed to the fair market value after the wreck or collision.

Additionally, it could be possible for you to deduct the professional fee you incur in obtaining a diminished value assessment-report.

Some information is provided courtesy of the Independent Auto Body Association and various other websites pertaining to Motor Vehicle Diminished Value and/or Motor Vehicle Value.

Important Notice: Vehicle Value Experts does not provide legal or financial advice and strongly recommend each user of this site seek a qualified professional familiar with such issues as outlined in this site prior to making a decision as to such.
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