Earthquakes And A Road To Recovery
Join 1000's of Authors at StreetArticles Today!

Earthquakes And A Road to Recovery

It could happen anywhere! This article will give you one road to recovery you may not have known about.

If a natural disaster damages your property, you have undergone a casualty loss, which can be deductible as an itemized deduction on your federal income tax return.

As a rule of thumb, to be considered a casualty loss, it must be caused by an "Act of God". Simple wear and tear over time does not count. One type of casualty loss is damage to property caused by earthquakes. You may take a deduction for earthquake casualty losses only to the extent that the loss is not covered by insurance.

You can deduct only the amount of the loss that exceeds 10% of your adjusted gross income (AGI) for the year. A one-time $100 deduction applies for the year.

Example: Your home is damaged by an earthquake. Your home has a $50,000 reduction in fair market value, but your adjusted cost basis was $20,000. Therefore, now the lower limit is $20,000. Your earthquake insurance covers $10,000 of the damage. The unpaid part of your claim is $10,000. Subtracting the $100, you end up with $9,900. If your AGI is $45,000, 10% is $4,500. You can deduct the portion of your loss above the $4,500, so you subtract that number from $9,900. Your total deduction is $5,400.

Where your disaster loss exceeds your current income, you may carry back the excess loss three years to get refunds of prior years' federal tax payments. If you still have some unused loss, you may carry it forward for up to 15 years.

What happens if you do not repair or replace the damage? You are entitled to the deduction when the loss occurs. You do not have to fix the damage to claim tax deductions.

Casualty losses are always deductible in the year the casualty occurred. However, if you have a casualty loss from a federally declared disaster, you have another option: You can treat the loss as having occurred in the prior year, and deduct it on your return or amended return for that tax year. This way, you can get a quick tax refund.

For your records, you will need to have the following:

Documents showing that you owned each asset you claimed was

damaged or destroyed—for example, a deed or receipt.

Contracts or purchase receipts showing the original cost of the item,

plus any improvements you made to it.

An appraiser can determine the value before and after the earthquake

and subtract the two; the difference is your disaster loss.

This road to recovery also applies to storm, fire and theft damages. It will lead to a less painful recovery by allowing the government to help pay for the costs of repair and/or replacement.

ABOUT THE AUTHOR: Eugene E. Vollucci, is considered to be one of the foremost authorities on real estate taxation and rental income investing and has authored four books in these fields. He is the Director of the Calstate Companies Center for Real Estate Studies, a real estate research organization.


Street Talk

No comments present
You May Also Like
Minister Of State for I&b Col Rajyavardhan Singh Rathore Promotes Film Industry at Cannes
Bollywood’s International success is a major example of the fact that Bollywood has become a desire of everyone. India is a particularly complex market, encompassing many languages and cultural phenomenon. Indian films are slowly gaining momentum in the International market and in a span of more than a decade, many…
By: World News Network in  News and Society  >  Economics   May 18, 2016  
0
  Likes: 0

Costs for Professional Automatic Enrolment Services
The more you read about the complicated requirements of the Pension Act 2008, the more concerned you get: it is high time to call to your rescue the best experts in managed auto enrolment services! Not only they meet the highest standards of professionalism but they also surprise you with…
By: Sheraton Veranda in  News and Society  >  Economics   May 12, 2016  
0
  Likes: 0

Nasik Boy Vikram Singh to Debut In Bollywood
Some actors struggle to find a foothold in the quagmire called Bollywood whereas some fly straight to the top where some Bollywood young debuts are golden making instant hits while some are totally tragic that dig graveyards. Every year hundreds of young aspiring actors come to Mumbai with the hope…
By: World News Network in  News and Society  >  Economics   Apr 30, 2016  
0
  Likes: 0

What Are The Documents Required For Rupay Bank Account (pmjdy)
Today we are going to share the how to apply for Pradhan Mantri Jan Dhan yojana(PMJDY) or open Jan Dhan yojana account 2015 , scheme and all of the information related to Pradhan Mantri Jan Dhan yojana(PMJDY) and it's benefits. Our team will always try to give their about Pradhan…
By: kankan219 in  News and Society  >  Economics   Mar 26, 2016  
0
  Likes: 0

Union Budget 2016 - 17 And Impact on Education Sector
(writes Dr. Paroma Mitra Mukherjee, Faculty at MDI Murshidabad) In Union Budget 2016, Arun Jaitley, Hon’ble Finance Minister, took the challenge to stick to the fiscal deficit at 3.5% of Gross Domestic Product (GDP) for 2016-17, after achieving the 3.9% of GDP target in 2015-16. Along with the background like…
By: DebriN Synergy in  News and Society  >  Economics   Mar 07, 2016  
0
  Likes: 0

How to Determine the Worth Of A Junk Car
There are thousands of junk vehicle and equipment lying around in unkempt fields, old garages, backyard sheds, and more. These vehicles may seem worthless, but they are actually still valuable assets that can be sold to a scrap metal yard or junk car buyer for cash! If you are one…
By: Sarahbeth in  News and Society  >  Economics   Feb 20, 2016  
0
  Likes: 0

Find Coach By Way Of Using Aso App Store Optimization Zero Cost Online Flash Games
A lot of consumers are generally ingested aback whenever they find that the app store optimization companies particular free of charge viewing publicised isn't really devoid of a few limits. A lot of financial institutions provide free of charge viewing exclusively to opportunity seekers whom go with one on one…
By: appgamenews in  News and Society  >  Economics   Jan 21, 2016  
0
  Likes: 0

Do Advertisements Really Have to Be Crappy?
Commoners are constantly bemused with promotional messages and slogans to grab their attention and manipulate their minds more than ever. Businesses are practically hell bent on outdoing their rivals to gain control over the market and get the bigger share of the pie. Advertising has become mandatory in getting the…
By: Adam Lee in  News and Society  >  Economics   May 31, 2016  
0
  Likes: 0

Managing And Disposing Excess Paint
Painting is the easiest and the most economical way to modify the outlook of any room. Home owners have even started experimenting with paint to craft paints related colour ideas that personify the diverse art and culture of Nepal. While mixing and matching during trials of different paints, chances are…
By: Adam Lee in  News and Society  >  Economics   Oct 30, 2015  
0
  Likes: 0

Slight Arrangements to Transform the Common Room Into A Family Room
Be it a lazy weekend, an evening family show on TV or an unplanned gathering of friends, the common room serves as the venue for all those wonderful times of laughter and fun. Putting in a little effort to perk up the room would only make the times together even…
By: Adam Lee in  News and Society  >  Economics   Oct 30, 2015  
0
  Likes: 0

Nigeria Fuel Price Hike - Beneficial?
The Nigerian Authority has began or better still Implemented a plan to remove fuel subsidy resulting in a hike in fuel price. Currently the Nigerian government claims to have spent more than $8bn in the past year, claiming this is one major reason for the poor infrastructural facilities in place.…
By: Tobi in  News and Society  >  Economics   Jan 04, 2012  
0
  Likes: 0

What Makes Cities Sustainable? City Planners Like Leon Churchill Weigh In
A good number of people consider the idea of a “sustainable city” as an oxymoron, given the massive amount of change cities need to meet ecological, societal, and economic requirements for actual sustainability. In the eyes of these people, at the rate change is happening now, sustainability is an unrealistic…
By: Casey Carpenter in  News and Society  >  Economics   Sep 01, 2015  
0
  Likes: 1

Newest State Policies Information In Real Time - influentials System Style
The almost govt shut down had been hogging the information, but you might have found more information on other essential present governmental experiences and quicker on Influentials System. If you want to know what's occurring in US State policies and present governmental information, then Influentials System will tell you -…
By: miz in  News and Society  >  Economics   Jan 22, 2014  
0
  Likes: 0

2015 Isn't Going Well for Canada
Every year, people begin with high hopes and celebrations, expecting the coming year to bring them good times, prosperity, and of course, happiness. Sounds good, but it’s not working out that way for Canada so far, just ask Stephen Harper, he’s probably having the worst year of his career, if…
By: michael61 in  News and Society  >  Economics   Feb 08, 2015  
0
  Likes: 0

Rough Economy
The economy in the US has improved a little, but people are still jobless, losing their jobs and homes across the nation. There are a number of factor that cause a bad economy, inflation, unemployment, tax laws and welfare are a few I would like to talk about today. Some…
By: Brandon13d in  News and Society  >  Economics   Jan 18, 2014  
0
  Likes: 0

Article Views: 1858    Report this Article