Did you know?
- Tax benefits can result from the destruction or damage to your property from a sudden, unexpected and unusual event such as the August 2016 Louisiana Flood event.
- Businesses and individuals with uninsured or under-insured flood losses may take a Federal Tax deduction based on the prescribed valuation method for determining a casualty loss.
- Businesses and individuals in a federally declared disaster area can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return.
- The maximum deduction for the casualty is the lesser of (i) the decline in value of the property before and after the event that gave rise to the casualty loss; or (ii) the property’s adjusted cost basis.
- The method of valuation is the difference between the fair market value (FMV) of the property immediately before and after the disaster and must be determined by a competent appraiser.
- An appraiser can use an adjuster’s cost of repairs estimate (Replacement Cost Value) to supplement the loss value determination. Such repairs must be necessary, non-excessive, cannot repair more than the damage suffered, not exceed the value of the property before the casualty and must be completed.
- Individuals may deduct casualty losses to contents not covered by insurance, however, businesses cannot deduct contents losses (Furniture, Fixtures and Equipment). Expenses for removing debris and clean-up costs are part of the deductible casualty loss.
How Jackson & Jackson can help –
- Jackson & Jackson’s experienced team of tax attorneys and claims management specialists stand ready to assist commercial clients with obtaining IRS casualty loss tax deductions available to those who sustained disaster-related property loss.
- Jackson & Jackson offers comprehensive services from the preparation of the casualty proof of loss to preparation of IRS Form 4864 for commercial clients.