SECTION 4. COST INDEXES SAFE

HARBOR METHOD

.01 In general . An individual within the scope of this revenue procedure may use the safe harbor method described in this section 4. If an individual owns two or more parcels of personal-use residential real property, the use of the Cost Indexes Safe Harbor Method for one parcel does not require the individual to use the Cost Indexes Safe Harbor Method, or any safe harbor method, for any other parcel.

Under the Cost Indexes Safe Harbor Method, an individual may use one or more of the cost indexes, as applicable, provided in this section 4 to determine the decrease in the fair market value of personal-use residential real property, including the personal residence, detached structures, and decking. Cost indexes are provided for three size categories of personal residences based on the square footage of the personal residence and for seven geographic areas.

In computing the decrease in fair market value under the Cost Indexes Safe Harbor Method, an individual must take into account the value of any no-cost repairs as described in section 6 of this revenue procedure.

If the Cost Indexes Safe Harbor Method described in this section 4 is used, the amount determined is the full amount of the decrease in fair market value of that personal-use residential real property and may not be increased by amounts related to items such as landscaping, debris removal, demolition, etc.

The Cost Indexes Safe Harbor Method applies only to the following three types of improvements on an individual’s personal-use residential real property: a personal residence (as described in section 3.02 of this revenue procedure), a detached structure (as described in section 3.03(6) of this reve

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nue procedure), and a deck (as described in section 3.03(7) of this revenue procedure). If there is any other type of improvement on an individual’s personaluse residential real property that is not described in sections 3.02, 3.03(6), and 3.03(7) of this revenue procedure, the individual may use the Cost Indexes Safe Harbor Method to determine the decrease in fair market value of the personal-use residential real property, but may not add any amount for the other type of improvements. The decrease in fair market value of the other type of improvement may be determined by another applicable method. For example, under the Cost Indexes Safe Harbor Method, no amount may be added to the decrease in fair market value of the personal-use residential real property for a residence that contains a home office, a residence in a structure that contains five or more residential units,

or a detached structure equipped with heating or air conditioning.

.02 Special Rules . (1) A personal residence may not be subject to more than one of the following tables: Table 1 (Total Loss); Table 2 (Near Total Loss); or Table 3 (Interior Flooding Over 1 Foot).

(2) A personal residence subject to Table 3 (Interior Flooding Over 1 Foot) also may be subject to Table 4 (Structural Damage From Wind, Rain, or Debris), but the square footage flooded may not be included in the square footage used for Table 4 (Structural Damage From Wind, Rain, or Debris).

(3) A personal residence subject to Table 3 (Interior Flooding Over 1 Foot) or Table 4 (Structural Damage From Wind, Rain, or Debris) also may be subject to Table 5 (Roof Covering Damage from Wind, Rain, or Debris).

Table 1 - Total Loss

(4) Table 6 (Damage to a Detached Structure) and Table 7 (Damage to Decking) may apply to any personal-use residential real property without regard to whether Table 1 (Total Loss), Table 2 (Near Total Loss), Table 3 (Interior Flooding Over 1 Foot), Table 4 (Structural Damage From Wind, Rain, or Debris), or Table 5 (Roof Covering Damage From Wind, Rain, or Debris) apply to a personal residence located on such property.

(5) If an individual’s personal-use residential real property contains more than one personal residence and the individual uses the Cost Indexes Safe Harbor Method, the individual must apply the applicable table, or combination of tables, to each personal residence.

.03 Tables . The following tables set forth the cost indexes for each corresponding category described in section 3.03 of this revenue procedure:

Total Loss - Cost Index Per Square Foot

Personal Residence Size and Location Texas Louisiana Florida Georgia South Carolina

Rico

Personal Residence Size and Location Texas Louisiana Florida Georgia South Puerto U.S. Carolina Rico Virgin

Islands

Small Personal Residence (Personal residence is less than $231 $231 $235 $231 $231 $231 $293 1,500 square feet)

Puerto

Medium Personal Residence (Personal residence is between $195 $195 $208 $195 $195 $195 $248 1,500 and 3,000 square feet)

Large Personal Residence (Personal residence is greater than $174 $175 $193 $174 $175 $175 $222 3,000 square feet)

For a personal residence that falls within the description of a total loss in section 3.03(1) of this revenue procedure, use Table 1 as follows:

(1) Determine the total square footage of the personal residence.

(2) Determine the size of the personal residence based on the total square footage described in Table 1.

(3) Determine which column applies based on the geographic location of the personal residence.

(4) Multiply the total square footage of the personal residence (from step 1) by the applicable cost index based on the appropriate column of Table 1.

Table 2 - Near Total Loss

Near Total Loss - Cost Index Per Square Foot

Personal Residence Size and Location Texas Louisiana Florida Georgia South Carolina

Rico

Personal Residence Size and Location Texas Louisiana Florida Georgia South Puerto U.S. Carolina Rico Virgin

Islands

Small Personal Residence (Personal residence is less than $185 $187 $190 $185 $187 $187 $237 1,500 square feet)

Puerto

Medium Personal Residence (Personal residence is between $156 $158 $166 $156 $158 $158 $201 1,500 and 3,000 square feet)

Large Personal Residence (Personal residence is greater than $139 $141 $154 $139 $141 $141 $179 3,000 square feet)

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For a personal residence that falls within the description of a near total loss in section 3.03(2) of this revenue procedure, use Table 2 as follows:

(1) Determine the total square footage of the personal residence.

(2) Determine the size of the personal residence based on the total square footage described in Table 2.

(3) Determine which column applies based on the geographic location of the personal residence.

(4) Multiply the total square footage of the personal residence (from step 1) by the applicable cost index based on the appropriate column of Table 2.

Table 3 - Interior Flooding Over 1 Foot

Interior Flooding Over 1 Foot - Cost Index Per Square Foot

Personal Residence Size and Location Texas Louisiana Florida Georgia South Carolina

Rico

Personal Residence Size and Location Texas Louisiana Florida Georgia South Puerto U.S. Carolina Rico Virgin

Islands

Small Personal Residence (Personal residence is less than $139 $143 $146 $139 $143 $143 $182 1,500 square feet)

Puerto

Medium Personal Residence (Personal residence is between $117 $121 $125 $117 $121 $121 $154 1,500 and 3,000 square feet)

Large Personal Residence (Personal residence is greater than 3,000 square feet)

$104 $108 $116 $104 $108 $108 $137

The cost indexes in Table 3 are applied only to the square footage of the personal residence that was flooded, rather than the total square footage.

For a personal residence that was flooded to a height of greater than 1 foot, as described in section 3.03(3) of this revenue procedure, and does not fall within the description of a total loss or near total loss in sections 3.03(1) and (2) of this

revenue procedure, use Table 3 as follows:

(1) Determine the total square footage of the personal residence.

(2) Determine the size of the personal residence based on the total square footage described in Table 3.

(3) Determine the square footage of the flooded area of the personal residence.

(4) Determine which column applies based on the geographic location of the personal residence.

(5) Multiply the flooded square footage (from step 3) by the applicable cost index based on the appropriate column of Table 3.

Table 4 - Structural Damage From Wind, Rain, or Debris Structural Damage From Wind, Rain, or Debris - Cost Index Per Square Foot

Percent of Damage Category Percent Damaged - Square Footage of Damaged Area/Total Square Footage of Personal Residence Percent Damaged U.S. Virgin

and Location Texas Louisiana Florida Georgia South Carolina Puerto Rico Islands

15% to 25% $189 $189 $202 $189 $189 $189 $240

26% to 50% $174 $174 $186 $174 $174 $174 $221

51% to 100% $157 $157 $168 $157 $157 $157 $199

The cost indexes in Table 4 apply only to the square footage of the damaged area of the personal residence, rather than the total square footage. Personal residences that sustained 100% wind, rain, or debris damage are those that sustained major structural damage throughout the entire personal residence necessitating substantial renovation (as defined in section 3.03(4) of this revenue procedure) of all of the rooms in the personal residence.

For a personal residence that sustained structural damage from wind, rain, or debris, use Table 4 as follows:

(1) Determine the total square footage of the personal residence.

(2) Determine the square footage of the damaged portion of the personal residence by adding the square footage of each room needing substantial renovation.

(3) Determine the percent of square footage of the personal residence that was

damaged by dividing the square footage that was damaged (from step 2) by the total square footage (from step 1).

(4) Determine which column applies based on the geographic location of the personal residence.

(5) Multiply the square footage of the damaged area (from step 2) by the applicable cost index based on the appropriate column of Table 4 (based on the percent of damage range in column 1 of Table 4).

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Table 5 - Roof Covering Damage From Wind, Rain, or Debris Roof Covering Damage From Wind, Rain, or Debris - Cost Index Per Square Foot

Personal Residence Size and Location Texas Louisiana Florida Georgia South Carolina

Rico

Personal Residence Size and Location Texas Louisiana Florida Georgia South Puerto U.S. Carolina Rico Virgin

Islands

Small Personal Residence (Personal residence is less $8 $8 $8 $8 $8 $8 $10 than 1,500 square feet)

Puerto

$8 $8 $8 $8 $8 $8 $10

Medium Personal Residence (Personal residence is between $8 $8 $8 $8 $8 $8 $10 1,500 and 3,000 square feet)

Large Personal Residence (Personal residence is greater than 3,000 square feet)

$7 $7 $7 $7 $7 $7 $9

If the personal residence sustained roof covering damage from wind, rain, or debris as described in section 3.03(5) of this revenue procedure, apply the applicable cost index in Table 5 to the total square footage under the roof (including the porch, patios, and overhangs).

For a personal residence that sustained roof covering damage from wind, rain, or debris, as described in section 3.03(5) of

this revenue procedure, use Table 5 as follows:

(1) Determine the total square footage of the ground floor of the personal residence.

(2) Add to the total square footage of the ground floor (from step 1) the square footage of any area of the roof that extends beyond the ground floor, such as porches and attached carports, to deter

mine the total square footage under the roof.

(3) Determine the applicable cost index in Table 5 based on the total square footage and the geographic location of the personal residence.

(4) Multiply the total square footage under the roof (from step 2) by the applicable cost index based on the appropriate column of Table 5.

Table 6 - Damage to a Detached Structure Damage to a Detached Structure - Cost Index Per Square Foot

Detached Structure Size and Location Texas Louisiana Florida Georgia South Carolina

Rico

Detached Structure Size and Location Texas Louisiana Florida Georgia South Puerto U.S. Carolina Rico Virgin

Islands

Up to 200 square feet $63 $65 $71 $63 $65 $65 $81

Over 200 and up to 400 square feet $50 $51 $56 $50 $51 $51 $64

Over 400 square feet $44 $46 $50 $44 $46 $46 $58

Puerto

For a detached structure on personaluse residential real property, as described in section 3.03(6) of this revenue procedure, apply the applicable cost index in Table 6 as follows:

(1) Determine the total square footage of the detached structure.

(2) Determine the size of the detached structure based on the total square footage described in column 1 of Table 6.

(3) Determine which column applies based on the geographic location of the personal residence.

(4) Multiply the total square footage of the detached structure (from step 1) by the applicable cost index based on the appropriate column of Table 6.

Table 7 - Damage to Decking Damage to Decking - Cost Index Per Square Foot

Location Texas Louisiana Florida Georgia South Carolina

Rico

Puerto

U.S. Virgin

Carolina Rico Islands

Use for all types of decking $27 $27 $29 $27 $27 $27 $33

For decking attached to a personal residence, as described in section 3.03(7) of this revenue procedure, apply the cost index in Table 7 as follows:

(1) Determine the square footage of the damaged area of the deck.

(2) Multiply the square footage of the damaged area of the deck (from step 1) by

the applicable cost index based on the appropriate column of Table 7.