SECTION 6. REDUCTION FOR

NO-COST REPAIRS

Under § 165(a), a casualty loss must be reduced by insurance or other amounts received, such as amounts given to an individual to repair the damage to the individual’s property due to the casualty. This includes the value of repairs to, or rebuilding of, the individual’s personaluse residential real property provided by another party at no cost to the individual (“no-cost repairs”), such as the repair or rebuilding of an individual’s personal residence by volunteers. No-cost repairs include repairs made for a de minimis or token cost, donation, or gratuity.

An individual who uses any safe harbor method provided in this revenue pro

cedure to determine the decrease in the fair market value of or the amount of loss to the individual’s personal-use residential real property or personal belongings must reduce the loss by the value of any no-cost repairs.