How do I file taxes and include our losses and reimbursements from a natural disaster?
We had our home destroyed by a Tornado in February of this year. We got about 2,000 from the government to help us in recuperation what we lost as well. I'm using taxact.com to do our taxes as I've done every year for a while now and I'm stuck on how to enter this in and exactly what to put, as I've never had to do this before.
Update:Yes it was declared a national disaster. It was the Tornadoes that hit Tennessee earlier this year.
Comments
You will use Form 4684 Casualty and Theft Losses. You deduct a casualty loss computed on Form 4684 on Schedule A. You have to know your basis (cost plus improvements) in your property, value at the time of the loss, value after the loss (only the land probably). You also have to know the amount of any actual or anticipated insurance reimbursements. Just plug in the numbers.
Don't forget to do the same for the contents that you lost.
The $2,000 from FEMA (probably) is not normally taxable or considered part of your reimbursement on Form 4684.
If your casualty event (tornado) was a Presidential Disaster, you have additional options available to you. It might be worth having a professional look at your return.
A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, and unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption.
If your property is not completely destroyed, or if it is personal-use property, determine your loss from a casualty by first figuring the decrease in fair market value of your property as a result of the casualty event. To determine the fair market value of your property, refer to Topic 703. Keep in mind the general definition of fair market value is the price at which property would change hands between a buyer and seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts.
Read more about Casualty and Theft Losses using this page in the IRS website.
http://www.irs.gov/taxtopics/tc515.html
I believe that you can key this in on Schedule A. You must complete Form 4684. there are more information you will need, I am sure you can do it on your own, it will just take time.
Good luck!
Was this in a Federally Declared Disaster Area (2008 and 2009)? I ask because the July $700B bailout bill changed the calculation of casualty losses.
1. Used be subtract $100, subtract 10% of your AGI and add it to your itemized deductions. 3 year carryback.
2. Now it's subtract $500 and take it even if you don't itemize. 5 year carryback. The currently printed pub 547 won't mention any of this.
Tornadoes in Kentucky and Florida and Hurricanes in Florida. Been fortunate sufficient to in no way have suffered entire losses. lost a shed here and there yet no longer something like an entire a house. Sorry to you and the different victims of Katrina. i desire the restoration is going stable for you.
Schedule A. . . . Form 4864. . . .casualty losses. . . . .insurance payments increase basis
www.irs.gov
casualty losses