The federal government provides a tax deduction for property casualty losses. This is an itemized deduction, so applicability depends on the specific finances of a taxpayer. Deductions decrease taxable income and the amount of tax due, and can therefore be useful to a home owner. This blog provides an overview of Plum Island home casualty loss tax deductions.
Definition of a Casualty Loss
The federal government considers a casualty loss as the “damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.” It could relate to natural disasters such as tornados or man-made ones such as acts of terrorism. There are other restrictions provided in IRS Publication 547: Casualties, Disasters and Thefts.
When to Take It
If the loss occured during an presidentially declared disaster, then you can resubmit your tax return from prior years to deduct the loss. This can get you a tax refund. Otherwise, home owners must hold off until the next tax filing.
Calculating the Deduction
First of all, the deduction is only available for costs not covered by insurance and other sources of aid. The amount of a deduction related to the decrease in market value of real estate resulting from the damage or destruction, the income of the home owner, and a few other factors. Federal and state tax laws may vary.
About An Overview Of Plum Island Home Casualty Loss Tax Deductions
Always consult with a tax professional regarding deduction qualifications, how much you cna take, and differences with federal and state amounts. This blog includes an overview of Plum Island home casualty loss tax deductions and is intended to inform you of potential deductions. It does not by any means guarantee that you can take advantage of deductions on your specific tax return.