“This Post Has Not Been Updated to Include Changes from the “Tax Cuts and Job Act” passed on December 22, 2017.”
2017 has brought more than its fair share of disasters. From hurricanes to hail storms, tornadoes to wild fires, it is claimed that this year has had the 2nd most natural disasters on record. Once people make it safely through the ordeal and start putting their lives back in order, thoughts turn to the financial side effects of the clean-up, rebuilding and loss of property that has happened.
What Are the Tax Issues Involved When Dealing with a Disaster?
How to Report What You Lost in a Disaster?
What Happens if it Becomes a Federally Declared Disaster?
If the disaster is severe enough, many times the government will proclaim it to be a federally declared disaster area. If this happens, you have the option of amending your prior year tax return with your loss numbers so that you get your money faster. Otherwise, you would wait and include it on the return you would file in the next calendar year.
The key to all of this is to maintain good records. You will need to know the original purchase price of the items affected by the disaster plus any improvements made to them since the original purchase, less any depreciation
Disclaimer – Descriptions provided in this article are presented as generalities. There are many factors not listed above which may impact the deductibility of disaster losses. This article should not be considered legal or tax advice. For advice on a specific transaction, please contact the AgriSolutions Tax department at firstname.lastname@example.org .