I am a victim of the four mile fire in Colorado this past fall. I am now submitting content loss items to my insurance company. I read that for items being depreciated that the tax you spent on the item is not depreciable. Example: If I paid $200 for an item plus $20 in taxes, only the $200 would be depreciable. If this item were depreciated @25%, the depreciation would be $50 leaving a payment to me of $150 plus the $20 paid in tax = $170. My insurance company insists that the payment to me would be 75% of $220 which = $165. Which is correct, if any? I would really appreciate a response.

About The Expert

Amy Bach

Amy Bach has been a professional advocate for insurance policyholders since 1984 and an attorney since 1989. She co-founded United Policyholders in 1991 and serves as the organization's Executive Director and primary spokesperson; shaping and overseeing the Roadmap to Recovery™, Roadmap to Preparedness, and Advocacy and Action programs. She is a nationally recognized expert on insurance claim and legal matters; frequently interviewed in print and broadcast media, and the author of numerous publications including "The Disaster Recovery Handbook", "WISE UP: The Savvy Consumer's Guide to Buying Insurance" and consumer tips and guides in the UP Claim Help Library.  Recognized by Money Magazine as a Money Hero, Bach is in her eighth consecutive term as an official consumer representative to the National Association of Insurance Commissioners, and is a member of the Federal Advisory Committee on Insurance.