Hurricane IAN - Lost our home & belongings

[LakeRat1]

Well, this is a first for us.... Never have we lost everything at one time, now to figure out what we can do.

We lost our home and belongings in Hurricane Ian...... We were in a 55+ Community made up of 685 RVs and Park Model Mobile Homes..... Most including ourselves have no flood insurance. based on what we know now, we do not expect any insurance payout, and very little, if any FEMA funds...... Market value before the hurricane with our lot was $250K..... We are homeless and looking to purchase another place..... SBA is offering low interest loans, but this is going to be a slow process........I am curious, on opinions/thoughts and tax implications........ I know that we can show our losses on our tax return. We want to get a new home asap, we have the funds in an IRA to pay cash.....

Thoughs/Opinions on next step to getting a new home ??

Thanks

 

[wearefinishedworking]

Did you own or rent the lot? I am sorry to hear about your loss but glad you were safe somewhere! Not clear if you want to stay there with a new home.

 

[LakeRat1]

Did you own or rent the lot? I am sorry to hear about your loss but glad you were safe somewhere! Not clear if you want to stay there with a new home.

We own our lot and have made the decision to move away from the coast, more to the middle of the state..... Right now the community is assessing the damage.... Our home looks repairable on the outside, inside the water was up aproximately 36" to our countertops..... We had recently remodeled with granite all new appliances, ceiling fans, etc..... If someone was into construction it would be salvagable..... I am not that person, so we are going to walk away...... Hope to sell the home and lot AS IS.... We are 1/2 mile from the coast in Ft Myers

 

[FLSUnFIRE]

Sorry to hear of your losses. Floods sure make a mess of everything. My cousin had about 3' in his house and I helped salvage what we could and I also helped 4 snowbirds that were out of town by packing up salvageable stuff in their condos before demo started in their units. I wouldn't wish a flood on anyone after witnessing the mess. Nevermind the beaches with wave action.



After my first home in FL, I avoided flood zones (mostly because I hated paying flood insurance). As I was preparing for Ian to hit Tampa Bay, I realized my old house would could have 5-10' water in it. I'm high now and only need to worry about my roof and windows -roof is HOA and windows are not in the budget yet. If I were to buy in a low area again, I would consider the property disposable in my mental accounting.



No real advice but if on high ground with a good roof and windows I'd feel pretty confident. Further south there is less high ground but, at least here in Pinellas Co, there is some land very close to water that is 30' up as we are at the end of an ancient ridge... it ain't cheap though.


Good luck dealing with your situation.

 

[Pellice]

I've seen a few articles on timing a sale of flooded property such as yours. If I remember correctly, you are supposed to avoid the first wave of buyers unless desperate (which you are not). And you seem to be in a position to buy in the middle of the state now, before prices go up with others moving inland. In fact, I remember the article's mentioning Lehigh Acres as a place, now downtrodden in parts, that was about to become a hot area. But this is all from a few online articles, so I'm sure you've heard more.

Sorry about the loss of your home. Even here, in far-off NJ, I have one relative and one friend affected by similar property losses in the Fort Myers area.

 

[Mark1]

So sorry about the loss of your home.

Yup, it seems like you can take the loss on taxes. I guess that means that you take the loss in 2022? Do you need to buy a new house in 2022 (or at least do the IRA withdraw in 2022) such that the loss and IRA tax bill offset? I don't have the answers, I'm just trying to generate some discussion from more knowledgeable folks.

 

[MBAustin]

Very sorry for your situation, LakeRat. You seem to be dealing with it quite well under the circumstances. I think a consultation with a good accountant would be worth the $$.

 

[cathy63]

Very sorry for your situation, LakeRat. You seem to be dealing with it quite well under the circumstances. I think a consultation with a good accountant would be worth the $$.

I am so sorry for your loss.

I agree with MBAustin. See an accountant or tax preparer who's familiar with disaster casualty losses ASAP. This gets complicated quickly and you have less than 90 days to take financial actions in 2022.

Since your losses occurred in a federally declared disaster area, you can deduct almost all of them. But deductions are only useful if you have income to offset them, so you may want to generate taxable income for this year even if you don't end up buying a new home until next year. You can generate income by doing Roth conversions or just withdrawing from IRAs or other tax advantaged plans and putting the money into taxable accounts.

As of yet, Congress has not passed income tax relief for withdrawals from qualified plans for Hurricane Ian and a quick search of pending bills didn't turn up anything. In the past they have waived the early withdrawal penalty if you're under 59 1/2, and also allowed distributions from IRAs to be spread over 3 years for calculating the ordinary income tax.

Here's what the IRS has been able to do without Congressional involvement: https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-hurricane-ian-in-florida

 

[street]

Sorry for your loss if it happened to me, I would be devastated. The only advice I would give is move out of hurricane danger zone. It looks like that is your plan.

If it happened once, it would happen again. That is with anything in life and a lesson that is not always learned from.

I wish you the best of luck.

 

[MichaelB]

Well, this is a first for us.... Never have we lost everything at one time, now to figure out what we can do.

We lost our home and belongings in Hurricane Ian...... We were in a 55+ Community made up of 685 RVs and Park Model Mobile Homes..... Most including ourselves have no flood insurance. based on what we know now, we do not expect any insurance payout, and very little, if any FEMA funds...... Market value before the hurricane with our lot was $250K..... We are homeless and looking to purchase another place..... SBA is offering low interest loans, but this is going to be a slow process........I am curious, on opinions/thoughts and tax implications........ I know that we can show our losses on our tax return. We want to get a new home asap, we have the funds in an IRA to pay cash.....

Thoughs/Opinions on next step to getting a new home ??

Thanks

Sorry for your misfortune.

We lost all our possessions in an international move back in ‘90. We lived in a hotel for 3 months (company paid) and had to replace everything. My one suggestion is, if at all possible, to take your time.

If you can afford to rent for a couple of months, do so. The stress of this situation may push you to make choices you might make differently in a couple of months. Others have also suffered great misfortune and are also looking for a fresh start, and a sense of urgency will limit options, temporarily increase demand and choices and may push prices up.

With time, your options increase and improve, you have more choices, and prices will normalize.

 

[pacergal]

LakeRat1, I am so sorry you are experiencing this.
I think ideas from others already such as a consult with an accountant familiar with disaster casualty, and renting are great ideas.
Take your time to process the shock, grief and stress on the loss of your home and finding a new place to live.

Best wishes to you as you move forward beyond the disaster of Ian.

 

[EarlyandLate]

So sorry for your terrible situation LakeRat.I have dreamed of moving to that area for many years, but Ian was a sobering slap of reality. I was glued to the webcast from ABC 7 in Ft Myers for the whole day during Ian. It was wrenching to see places I loved going wiped away.

I have no specific advice, but others here have shared good advice. Be patient and seek advice from professionals who know what they're talking about. Best wishes to you!

 

[ExFlyBoy5]

I am sorry to hear about your losses...it's terrible.

I w*rked for the SBA for a short period doing legal reviews for disaster loans you are speaking of. The folks at SBA really care about what they are doing and will move the process along at a pretty good clip. Most of the delays I encountered were because of incomplete applications/forms/etc. Many of the folks that work disaster loans for the SBA have been working *mandatory* 60 hour weeks for quite a while now because of the case loads.

Also, you will be very, VERY hard pressed to find a similar loan product that has such favorable terms.

 

[Act2]

No advice from me, but sending good wishes your way. So sorry for your loss of property; glad you are safe.

 

[Dreamer]

I am sorry to hear about your terrible situation. I do not have any advice, but wish you the best of luck in figuring out what to do.

 

[Sunset]

Sad to hear of your loss, strangely I was tempted to buy a place near where IAN hit, and now I'm thinking maybe just visit FL.

From your Location info, don't you have a home in Lake Of the Ozarks, MO ?

 

[MarieIG]

I am sorry for your loss.

We had a flood in our home which was under contract last year, and mold quickly became a problem. This led to the need for mold remediation and, due to the age of the home, asbestos rebatement. (A large part of the house had to be torn down to the studs.)

Is there anything which can be done to limit the mold growth?

 

[powerplay]

I am sorry to hear about your loss. I hope you find a new home soon and can get settled in.

 

[Scuba]

So sorry for your property loss. Hurricanes are so devastating. Glad you are in the position to recover from this. I agree with the suggestion of renting for a while and allowing yourself time to make the big decisions you’re facing.

 

[Rianne]

So sorry for your loss. Friends of ours lost everything on Sanibel Island. It was their 2nd home. They had to access the property by boat. Thankfully, they were not there during the hurricane. The disaster is quite unbelievable. Shock

 

[LakeRat1]

Thank You for your thoughts and best wishes..... We are renting a house month to month ...... I have sent our tax lady information to get her advise on how to move forward with either taking a loan or paying cash for a new home....... FEMA and the SBA have been no help thus far, met with both of them one on one and we are not moving forward..... Insurance said we had $590ish on wind damage, my deductible was $1240..... No Flood Insurance, the surge was 10' our home is 5 foot on blocks.... It is a total loss..... . I am thinking if I have a home and belongings loss of $250k and I take that out of my IRA (I am 60 no penalty). Will I have to pay federal taxes on that $250K? I have been paying exstimated taxes on our income streams thus far for 2022....Until this past month

 

[cathy63]

... I am thinking if I have a home and belongings loss of $250k and I take that out of my IRA (I am 60 no penalty). Will I have to pay federal taxes on that $250K?...

This is what your tax advisor should help you figure out. But I am sorry to tell you that your loss is not actually the amount you could have sold the property for right before the hurricane. If the fair market value was $250K, then some of that amount is almost certainly unrealized capital gains, and those are not part of your loss. I know, this doesn't seem fair, but it's the same as if you bought a stock for $10, it went up to $100 and then the company declared bankruptcy. Your loss in that case would be $10, not $100. The $90 profit that you could have had if you had sold at the right moment just evaporates.

Your loss for your home is going to be the adjusted cost basis minus the value retained in the land and any salvage value in the building. So if you paid $100K for it, and put in $50K of improvements and you can still sell the land and remainder of the building for $40K, then your loss on the home is $110K. (There's an alternate calculation where you would use the reduction in fair market value if that amount is smaller, but it doesn't sound like that would be the case here. Your tax advisor should confirm that though.)

Your loss for the home's contents is the depreciated value of the furniture, carpets, etc as if they were appraised right before the hurricane hit. Unfortunately you don't get the cost basis for these items, but the actual value, which will be less.

Add the losses from the property and contents together and subtract 10% of your AGI, then subtract another $100. That's the amount of your loss that can be deducted on your taxes. Since an IRA withdrawal is included in your AGI, there's a balancing calculation that needs to be done here. If you take a $250K withdrawal, then that reduces your deductible loss by $25K, so you might not want to take that much this year. It might be better to split it over two years.

 

[cyber888]

I'm very sorry for your loss. Since you've lived in a mobile home, you may want to take a look at these tiny mobile homes that is well crafted and starts at around $85,000-$100,000. You can hook it up a truck and maybe find a cheap land or rent land at another mobile home community. The company has its own financing plan.

https://timbercrafttinyhomes.com/tiny-home-models/#the-denali-xl

 

[LakeRat1]

This is what your tax advisor should help you figure out. But I am sorry to tell you that your loss is not actually the amount you could have sold the property for right before the hurricane. If the fair market value was $250K, then some of that amount is almost certainly unrealized capital gains, and those are not part of your loss. I know, this doesn't seem fair, but it's the same as if you bought a stock for $10, it went up to $100 and then the company declared bankruptcy. Your loss in that case would be $10, not $100. The $90 profit that you could have had if you had sold at the right moment just evaporates.

Your loss for your home is going to be the adjusted cost basis minus the value retained in the land and any salvage value in the building. So if you paid $100K for it, and put in $50K of improvements and you can still sell the land and remainder of the building for $40K, then your loss on the home is $110K. (There's an alternate calculation where you would use the reduction in fair market value if that amount is smaller, but it doesn't sound like that would be the case here. Your tax advisor should confirm that though.)

Your loss for the home's contents is the depreciated value of the furniture, carpets, etc as if they were appraised right before the hurricane hit. Unfortunately you don't get the cost basis for these items, but the actual value, which will be less.

Add the losses from the property and contents together and subtract 10% of your AGI, then subtract another $100. That's the amount of your loss that can be deducted on your taxes. Since an IRA withdrawal is included in your AGI, there's a balancing calculation that needs to be done here. If you take a $250K withdrawal, then that reduces your deductible loss by $25K, so you might not want to take that much this year. It might be better to split it over two years.

This is almost the exact words my tax lady said ..... She is working up the #'s I sent her yesterday ...... She also asked, why don't I take a loan for a few years ...... Something to think about

 

[Midpack]

We own our lot and have made the decision to move away from the coast, more to the middle of the state..... Right now the community is assessing the damage.... Our home looks repairable on the outside, inside the water was up aproximately 36" to our countertops..... We had recently remodeled with granite all new appliances, ceiling fans, etc..... If someone was into construction it would be salvagable..... I am not that person, so we are going to walk away...... Hope to sell the home and lot AS IS.... We are 1/2 mile from the coast in Ft Myers

That sounds like the best choice.

We want to live on the east coast, but we live several hours inland precisely because we didn't want the risk of having our lives disrupted by a hurricane. With our without great insurance coverage, hurricane disruptions turn lives upside down.

Very sorry for your loss, best of luck.