I want to run this person's advertisement on a local facebook page by some experienced tax professionals:
"If you know any home owners who had hurricane and flood damage, let them know there is a special tax deduction for fair market value loss, and their 2016 income tax return can be redone now for an additional check that can be received in as little as 6 weeks from now. I specialize in this so have them contact me via phone or Facebook. It does not matter if they were reimbursed from insurance or FEMA.. I repeat It does not matter if they were reimbursed from insurance or FEMA. THIS IS NO GIMMICK OR SCAM....$$$$$$$"
I just wanted to make sure that this deduction is legitimate and that it can also be retroactively applied.
Thank you for any information,
It DOES matter if insurance reimburses. We still do not have formal protocol released from the IRS as the laws allowing anything were just passed by congress.
Unreimbursed casualty losses can be deducted (as an itemized expense) on taxes. As @Steven Hamilton II points out - if you got insurance money, it was reimbursed - and therefore can't be claimed as a casualty loss deduction.
If your casualty happened in a federally declared disaster area you can apply the casualty loss to the previous year's tax return (by filing an amended return) and it might get some money in your hands sooner. https://www.irs.gov/pub/irs-pdf/p547.pdf
The situation is continuing to unfold, so unless you were desperate, I'd wait. Washington likes to sling about some largess after big events like the ones we've experienced this hurricane season. The situation may get better for those who wait.
So do unreimbursed casualty losses apply to income properties as well? If they do, do you have to be a Real Estate Professional in order to take the deduction same year?
I didn't have insurance so no reimbursement there but I would think FEMA grant money received would at least be considered a partial reimbursement.
How do you determine the amount of the loss? I know the SBA told me (for my personal home) that they would lend 125,000 for damages and 38,000 for contents at 1.75% with a 30 year term. Would I use those numbers combined for my total losses?
Thanks for the info!
I could recreate this pub for you, or you could just go to the source!
Start reading on page 4. That will tell you how to figure the loss on income producing properties.
Be sure to read 13-15 on disaster area losses.
A tax professional is probably a good idea, but I'd avoid any who are shouting about how you can get big bucks out of Uncle Sugar on Facebook. My $0.02.
Good Luck with Your Clean Up. Hurricane Matthew rolled through here last year and we had quite a bit of damage. (Nothing like y'all, though.) I had several clients who experienced problems with fly-by-night contractors who set up shop because the demand was so high they could inflate prices for unimpressive work. Watch out for that.
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