Claiming casualty theft loss on your 2014 taxes after the floodi - FOX 32 News Chicago

Claiming casualty theft loss on your 2014 taxes after the flooding

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(WJBK) - For those individuals who suffered loss as result of the recent flood, you may be entitled to casualty theft loss to claim on your 2014 tax return.

A casualty is damage, destruction or loss of property resulting from an identifiable event due to some sudden, unexpected or unusual cause.

The amount of the loss claimed is subject to a $100 floor for each loss and are deductible only to the extent they exceed 10 percent of the taxpayer’s adjusted gross income for that year. This loss is also reducing by any insurance proceeds awarded to cover the claim.

To determine your deduction you must first calculate your loss.  For most people, to determine your loss, you need to calculate what the decrease was in fair market value of the property before and after the casualty; less the limitation mentioned above is an approximation of the amount of your deduction.

Documenting the loss is important.  Taking pictures, keeping receipts and documenting the damage is necessary to obtain your full value.

In addition if the loss is large enough, you may want to consider hiring an appraiser to help determine the true fair market value decrease. The appraiser’s report must outline and document the damage, comparable sales in the property area as well as the method used to value the property.  

Ultimately, the taxpayer has the burden of proof to substantiate the claim, and you should contact your tax advisor to see if your loss would qualify.

The information comes from Baker Tilly Virchow Krause, LLP, in Southfield, Michigan.

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