Suffer damage from Hurricane Dorian? The federal tax laws may be of help. If your home, car or belongings were damaged in a federally declared disaster, you can deduct your losses to the extent you aren’t reimbursed by insurance. Your loss is equal to the smaller of the property’s adjusted basis or decline in value, less any insurance proceeds you got or expect to get. Use Form 4684 to figure the loss. Go to www.fema.gov/disasters to view a list of federally declared disaster areas. Only itemizers can claim a deduction for damage to nonbusiness property. And two offsets apply: The loss that you figure is first reduced by $100. The balance is deductible only to the extent it exceeds 10% of adjusted gross income. You can opt to take the loss on the return for the year preceding the disaster. For example, losses incurred in 2019 can be deducted on your 2018 or 2019 return. If you’ve already filed your 2018 return, you can amend it to take the write-off. The rules for deducting casualty losses on business assets are more liberal. A business casualty loss needn’t be attributable to a federally declared disaster. The $100 and 10%-of-AGI offsets don’t apply. And nonitemizers can write off losses.
Hurricane Dorian Losses
