The Internal Revenue Service (IRS) allows a tax deduction for home casualty losses. This is an itemized deduction, so qualification depends on the personal finances of a taxpayer. Deductions drop taxable income and the taxes due, and can therefore be helpful to a home owner. This article provides information on West Newbury MA real estate casualty loss tax deductions.
Definition of a Casualty Loss
The federal government defines a casualty loss as the “damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.” It can take place with natural disasters such as tornados or man-made ones such as vandalism. There are other restrictions detailed in IRS Publication 547: Casualties, Disasters and Thefts.
When to Deduct
If the event occured during an presidentially declared disaster, then you can resubmit your tax return from the previous year to deduct the damage. This can lead to a tax refund. Otherwise, property owners must hold off until the next tax filing.
First and foremost, the deduction is only applicable to expenses not reimbursed by insurance and other resources. The amount of a deduction is calculated by the decline in market value of a home resulting from the damage or destruction, the income of the tax payer, and a few other factors. Federal and state tax laws may differ.
About Information On West Newbury MA Real Estate Casualty Loss Tax Deductions
Always reach out to accountant regarding deduction qualifications, calculating exact amounts, and variations in federal and state returns. This blog provides information on West Newbury MA real estate casualty loss tax deductions and is intended to education you on potential deductions. It does not at all guarantee that you will be able to use deductions on your particular tax return.