Your Friends at the IRS are here to help

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If you suffered a casualty loss in the flood, or due to the loss of power at your home or business, there are two options on the deductibility of the loss. It can be claimed in the year the event occurred or the prior year. In this case, a loss could be claimed on either your 2016 return (including an amended return, if you have already filed) or your 2017 return. You should consult with your tax advisor to see which year it will be most advantageous to claim the loss. Some of the factors to be considered are the time value of money, the possibility of tax rate changes due to tax legislation, the taxes actually paid/payable in the year the loss is to be claimed, etc. The loss can currently only be claimed as an itemized deduction, but Congress may allow a deduction similar to that for the Tropical Storm Sandy victims.

In calculating the amount of your loss, the loss is the amount not reimbursed by any insurance claims. The loss can include the following:

1) The value of the possessions (including cars, personal property, etc.) damaged by the storm;

2) The value of items in your refrigerator and freezer lost due to power issues (this can be significant if bought at the Rodeo auction, for example);

3) The increased cost of food over what it would have cost at your home;

4) The cost of temporary housing;

5) The cost of removing trees damaged in the storm;

6) The cost to restore your home to its condition prior to the storm, including cleaning, repairs, and landscaping;

7) Additional costs incurred for child care that would not have been incurred.

For more information, visit the IRS website.