Small Business Taxes & ManagementTM--Copyright 2019, A/N Group, Inc.
Introduction
It seems that the number of natural disasters in the U.S. this year is higher than in recent years. The new tax law precludes a deduction for personal casualty losses unless the loss is attributable to a disaster declared by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. We discuss in our daily news section and the IRS highlights major disasters were it provides special relief enabling taxpayers to file returns late without penalty, etc. But there's another declaration by FEMA that provides relief to businesses and individuals that is not provided special relief by the IRS for filing returns, paying, etc. Declarations in these situations still provide relief to taxpayers in the form of allowing a deduction for any casualty losses related to the disaster. These declarations also allow taxpayers to deduct a loss on their current or prior year's return.
The ability to deduct losses on a prior year's return can be particularly attractive. That's because in the year of the loss, say 2019, your income may be low and consequently any deduction may be worth less than in the prior year. That's not automatically true. You'll have to work through the numbers, but the ability to make such an election should not be discounted.
In the remainder of the article below we've listed recent diasters where casualty losses are deductible, and not covered at the IRS site . These declarations are posted on the FEMA Diaster website. Check with your tax advisor for the latest updates and to see if you qualify.
Recent Qualifying Disasters
Alabama--February 19 to March 20, 2019--severe storms, straight-line winds, tornadoes and flooding. Counties of Blount, Cherokee, Colbert, DeKalb, Franklin, Greene, Jackson, Lamar, Madison, Marion, Morgan and Winston.
California--February 13-15, 2019--severe winter storms, flooding, landslides, and mudslides. Counties of Calaveras, Colusa, Marin, Mariposa, Mendocino, Modoc, Napa, Riverside, Santa Barbara, Shasta, and Trinity.
California--February 24-March 1, 2019--severe winter storms, flooding, landslides, and mudslides. Counties of Amador, Butte, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Marin, Mariposa, Mendocino, Monterey, Napa, Sonoma, Tehama, Trinity, and Tuolumne.
Tennessee--February 19 to March 30, 2019--severe storms, flooding, landslides, and mudslides. Counties of Anderson, Bedford, Bledsoe, Blount, Campbell, Carter, Cheatham, Claiborne, Clay, Cocke, Coffee, Decatur, Dekalb, Dickson, Dyer, Fentress, Gibson, Giles, Grainger, Greene, Hamblen, Hamilton, Hancock, Hardin, Hawkins, Hickman, Houston, Humphreys, Jackson, Jefferson, Johnson, Knox, Lake, Lauderdale, Lawrence, Lewis, Lincoln, Loudon, Marion, Marshall, McNairy, Moore, Morgan, Obion, Overton, Perry, Rhea, Roane, Robertson, Scott, Sequatchie, Sevier, Smith, Tipton, Unicoi, Union, Van Buren, Warren, and Wayne.
Kentucky--February 6 to March 10, 2019--severe storms, straight-line winds, flooding, landslides, and mudslides. Counties of Adair, Ballard, Bell, Boyd, Breathitt, Butler, Campbell, Carlisle, Carroll, Carter, Casey, Clay, Crittenden, Cumberland, Edmonson, Elliott, Estill, Floyd, Fulton, Grant, Greenup, Hancock, Harlan, Henderson, Henry, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Livingston, Madison, Magoffin, Marion, Marshall, Martin, McCracken, McCreary, Metcalfe, Morgan, Nicholas, Owen, Owsley, Pendleton, Perry, Pike, Powell, Rockcastle, Russell, Trigg, Union, Washington, Wayne, Webster, Whitley, and Wolfe.
Mississippi--February 22 to March 29, 2019--severe storms, straight-line winds, tornadoes, and flooding. Counties of Alcorn, Carroll, Calhoun, Chickasaw, Clay, Coahoma, Grenada, Itawamba, Lafayette, Lee, Leflore, Lowndes, Montgomery, Panola, Pontotoc, Prentiss, Quitman, Sunflower, Tallahatchie, Tishomingo, Union, Webster, and Yalobusha.
Missouri--March 11 to April 16, 2019--severe storms, straight-line winds, and flooding. Counties of Andrew, Atchison, Buchanan, Carroll, Chariton, Holt, Mississippi, New Madrid, Pemiscot, Perry, Platte, Ray, and Ste. Genevieve.
Montana--March 20 to April 10, 2019--flooding. Counties of Daniels, Lake, McCone, Park, Powder River, Stillwater, Treasure, and Valley.
Oregon--February 23-26, 2019--severe winter storms, flooding, landslides, and mudslides. Counties of Coos, Curry, Douglas, Jefferson, and Lane.
Copyright 2019 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536
--Last Update 06/21/19