To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. But other measures can also be used to establish certain decreases. An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. The appraiser must recognize the effects of any general market decline that may occur along with the casualty. This information is needed to limit any deduction to the actual loss resulting from damage to the property.
Several factors are important in evaluating the accuracy of an appraisal, including the following.
The appraiser's familiarity with your property before and after the casualty or theft. The appraiser's knowledge of sales of comparable property in the area. The appraiser's knowledge of conditions in the area of the casualty. The appraiser's method of appraisal. The appraisal fee is not a part of the casualty or theft loss.