Deducting a Disaster
If you suffer a loss to your personal property or real estate because of a natural disaster, you may be able to deduct the losses you incur. Here are some tax tips to keep in mind when deducting a disaster loss:
- The deduction is a disaster loss is called a casualty loss, which occurs when there is a sudden, unexpected, or unusual event.
- You cannot deduct the normal wear and tear to real or personal property.
- You must reduce your casualty loss deduction by the amount that you receive from any insurance claim.
- You must deduct your casualty loss in the year in which the disaster occurred.
- If you are taking a casualty loss on your personal property, you must reduce your loss by $100.
- If you are taking a casualty loss on your personal property, you must reduce your loss by 10% of your adjusted gross income.
- Report your casualty loss on Form 4684.
If you are facing a casualty loss or need some tax assistance, contact our office at www.Hoorfarlaw.com or 816-524-4949.