Recovering from a disaster is not easy. But with the help of insurance and the IRS, expenses you incur from property damage and possible ensuing theft, may be reimbursable.
IRS Provides Tax Relief for Expenses Caused by a Disaster and Not Covered by Insurance
Specifically, IRS Publication 547 addresses casualty, disaster and theft losses (including federally declared disaster areas). You can find detailed advice on when and how you may be eligible to deduct losses not reimbursed by your insurance on your individual income taxes. Topics of this publication include:
- Definition of a Casualty
- How to compute your gain or loss
- How to treat insurance and other reimbursements
- The limits of the deduction
- When/How to report a casualty
- Special rules for disaster losses
Internal Revenue Definition of a Casualty Loss
The IRS definition of “casualty loss” is quite broad:
A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration.
Make Sure You are Properly Insured Before a Disaster Strikes
At a time of loss, any benefit the IRS can offer may prove a welcome addition to your financial recovery, but it's best to avoid having to deal with the IRS at all...BY MAKING SURE YOU'RE INSURED PROPERLY IN THE FIRST PLACE. Denver West Insurance Brokers is a local insurance broker on the west side of Denver in Golden Colorado. We serve clients in the whole state of Colorado and are conveniently located near Arvada, Wheat Ridge, Evergreen, Morrison, Lakewood and Littleton. All our staff are licensed agents. Give us a call today. We are here to help make sure your business and home are property insured against disaster.