DISASTER VICTIMS SHOULD DOCUMENT LOSSES BEFORE CLEAN-UP BEGINS
From the Georgia Association of Enrolled Agents (GAEA)
Taxpayers who suffered any type of business or
personal property damage during Hurricanes Katrina, Rita and Wilma (or other storms) should
take immediate action to document losses for insurance and tax purposes.
The required document process does not need to be
difficult, according to the National Association of Enrolled Agents (NAEA).
“It is very important that people take pictures or
videotapes and do a complete inventory of damage before the mess gets
cleaned up,” according to NAEA disaster specialist Carol W. Thompson, EA,
“A month from now, people are not going to remember what they
threw away.”
To organize a written inventory, Thompson recommends
Internal Revenue Service Publication 584, “Casualty and Disaster Loss
Workbook.” She describes the booklet as “wonderfully helpful” in
conducting a room-by-room inventory of damage. The workbook may be
obtained by calling the IRS at 800-829-3676, or by visiting the IRS
website at
http://www.irs.gov/pub/irs-pdf/p584.pdf.
Enrolled Agents are individuals licensed by the
federal government to advise consumers in all matters of taxation. A
disaster loss is tax deductible to the amount over any insurance
reimbursement, with three limitations: a deductible of $100 must be
subtracted, the total loss must exceed 10 percent of the taxpayer’s
adjusted gross income, and losses are listed as an itemized deduction.
For detailed information on claiming a casualty loss tax deduction, see
IRS Publication 547 on the IRS website at
http://www.irs.gov/pub/irs-pdf/p547.pdf.
Tax deductions for buildings with structural damage
require a qualified appraisal and records of the repairs to restore the
building to its previous condition.
Thompson cautions that all claims for damage must
first be submitted to the property owner’s insurance carrier, even if
the property is not covered, in order to take a casualty loss
deduction.
Taxpayers in the Presidential Disaster Areas declared
in Louisiana, Mississippi and Alabama
Click Here.
GeorgiaTaxpayers who need professional tax assistance
may locate Enrolled Agents in their area by visiting the Georgia
Association of Enrolled Agents (GAEA) website at
www.4gaea.org.
The NAEA also has made available a list of
suggestions for the reconstruction of needed personal and business records
lost in the flooding:
Record Reconstruction
Information.
Also available is as a step-by-step guide to
safeguarding important records before a disaster occurs:
Create a Disaster Evacuation
Box.
