Small Business Accounting - Before
the Tax Cuts and Jobs Act, individuals could claim as itemized deductions
certain personal casualty losses, not compensated by insurance or otherwise,
including losses arising from fire, storm, shipwreck, or other casualty, or
from theft. There were two limitations to qualify for a deduction: (1) a loss
had to exceed $100, and (2) aggregate losses could be deducted only to the extent
they exceeded 10% of adjusted gross income.
However, for tax years 2018 through 2025, the personal casualty
and theft loss deduction isn't available, except for casualty losses incurred
in a federally declared disaster. So, a taxpayer who suffers a personal
casualty loss from a disaster declared by the President under section 401 of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act still will
be able to claim a personal casualty loss as an itemized deduction, subject to
the $100-per-casualty and 10%-of-AGI limitations mentioned above. Also, where a
taxpayer has personal casualty gains, personal casualty losses can still be
offset against those gains, even if the losses aren't incurred in a federally
declared disaster.
The casualty loss deduction helped to lessen the financial
impact of casualty and theft losses on individuals. Now that the deduction
generally won't be allowed, except for declared disasters, you may want to
review your homeowner, flood, and auto insurance policies to determine if you
need additional protection.
I hope this information helps you understand these changes.
Please call me if you wish to discuss how this change or any of the many other
changes in the Tax Cuts and Jobs Act could affect your particular tax situation,
and the possible planning steps you might consider in response.
We're
here to help! For no obligation free consultation contact us today!
Amare
Berhie, Senior Accountant
CFO
Services http://youtu.be/EYJdQtbPZAI
(651) 300-4777
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