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can we discuss dos/don'ts for tax filings for flood victims?
Posted on 1/1/17 at 8:13 pm
Posted on 1/1/17 at 8:13 pm
Am I supposed to be reporting my expenditures - materials and labor?
Leftover income from house repair - an earlier said you had to report.?
thanks to all, Happy New Year
Leftover income from house repair - an earlier said you had to report.?
thanks to all, Happy New Year
Posted on 1/1/17 at 9:49 pm to lsufan112001
How is everyone reporting furniture that was destroyed in the flood?
We were between houses so we had our stuff in a storage room which flooded.
We were between houses so we had our stuff in a storage room which flooded.
Posted on 1/1/17 at 10:01 pm to lsufan112001
Excellent thread idea. I'm going to need some help going forward. I have been able to do my own taxes so far, but I doubt I could handle it this year.
Posted on 1/1/17 at 10:34 pm to lsufan112001
Wouldn't insurance factor into this in a big way?
Posted on 1/2/17 at 7:43 am to lsufan112001
The area I lived in back in 1994 experienced a big flood. I had just bought my first house a couple of years earlier and wasn't sure how to handle my taxes so I contacted the IRS. They told me to compare the difference between the value of my property the day before and they day after the flood and to take the difference as a loss. They recommended hiring an appraiser, but said it wasn't required. I felt uncomfortable trying to do the estimate myself, so spent a small amount on an appraiser to lessen the likelihood of being questioned on the estimated loss. I had about a half a foot of water in my home during the flood. The appraiser estimated that my $63K starter home was worth about $30K less in the unrepaired state after the water receded. I also estimated how much less everything I owned was worth. For example, my refrigerator still worked, but how much less would I be able to sell a refridgerator, washer, drier, etc for that had been in a flood even if there appeared to be no damage? I didn't consider actual repair costs compared to the loss. I was pretty nervous about this approach, but reviewed it with the IRS. I didn't have flood insurance, but did deduct my FEMA money. Needless to say, I didn't pay any income taxes that year.
Posted on 1/2/17 at 10:27 pm to lsufan112001
Form 4684 for Casualty Losses is going to be something you will want to become familiar with.
Long story short:
1) You measure "the reduction in fair market value" of the property affected by the storm.
2) If your total reduction in fair market value is more than all of your reimbursements (fema, insurance, etc), then you potentially have a casualty loss. You can claim this on your 2016 return, or amend your 2015 return to claim it. Casualty losses are itemized deductions.
3) If your total reduction in fair market value is less than all of your reimbursements, then potentially you have a casualty gain and have to pay tax on the additional money you got.
This is all for individual income taxes, assuming no business use of property. Businesses of course get a bit more complicated.
Long story short:
1) You measure "the reduction in fair market value" of the property affected by the storm.
2) If your total reduction in fair market value is more than all of your reimbursements (fema, insurance, etc), then you potentially have a casualty loss. You can claim this on your 2016 return, or amend your 2015 return to claim it. Casualty losses are itemized deductions.
3) If your total reduction in fair market value is less than all of your reimbursements, then potentially you have a casualty gain and have to pay tax on the additional money you got.
This is all for individual income taxes, assuming no business use of property. Businesses of course get a bit more complicated.
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