How the tax man helps after a storm.

If you live in the northeast and were pummeled by the October snow storm, Realty Times has a, well, timely, article dealing with the disaster loss tax deduction. Headlined, “How to Write Off a Disaster Loss For Property Damage” by Broderick Perkins, it’s on point.

“Next year, 2012, is supposed to be the year we lose it all, but 2011 came close. It's shaping up to one of the worst years ever for disaster losses.

“Thanks to tax relief, it's not the end of the world.

“The Internal Revenue Service (IRS) allows you a tax deduction for casualty losses, including losses due to property damage or destruction.”

Casualty losses are treated similarly to mortgage interest and property taxes, i.e., casualty loss is an itemized deduction included on Schedule A that are subtracted from your adjusted gross income, which reduces your taxes by reducing the amount of your income that is actually taxed.

Some rules,

“First, the deduction is only available to the extent that insurance or other forms of compensation don't cover the cost of damage or destruction.

 “Second, if the disaster carries a presidential declaration, you can immediately, after the disaster has the presidential declaration, amend your last tax return to deduct the loss. Otherwise, you must wait to file for the deduction with your next tax return.

“Third, state tax laws vary on casualty loss deduction and because the deduction can involve large amounts and complex calculations, you should seek the help of an enrolled agent, certified public accountant or other tax professional to help you complete you state and federal tax returns.”

 Read the full article here to learn more about casualty losses and your income taxes.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti AT vested.com - www.vested.com

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