Washington, DC (December 6, 2016)—Hurricane-force winds topping 90 mph and downed power lines have spread the fire in the Chimney Tops of the Great Smoky Mountains to Gatlinburg, TN, and beyond. Mandatory evacuations have not prevented 14 fatalities and over 100 injuries, with 1,684 damaged or destroyed structures.
Those affected may not know that there are special tax provisions designed to help in recovery. The National Association of Enrolled Agents (NAEA) offers the following tax advice to help victims deal with the financial ramifications of a disaster.
Conduct a room-by-room inventory of damage. Tax deductions for buildings with structural damage require a qualified appraisal and record of the repairs to restore the building to its previous condition. All claims must be first submitted to the property owner’s insurance carrier, even if the property is not covered, in order to take a casualty loss deduction. IRS has a helpful Casualty and Disaster Loss Workbook available online to help you catalogue your losses (Publication 584).
The process can be confusing, however. In order to follow the instructions from IRS, you must know the definitions of cost or other basis and fair market value. After living through a disaster, with all of the related challenges, this may be more than most people want to take on without the help of a professional. To make sure you take advantage of every tax provision to help you through a disaster, it would be wise to consult a licensed tax expert. Enrolled agents (EAs) are licensed by the U.S. Department of Treasury and overseen by the IRS. EAs provide tax preparation, tax advice, and tax planning services in addition to helping taxpayers resolve problems with the IRS. To find an enrolled agent in your area, go to the “Find a Tax Expert” directory at eatax.org.
National Association of Enrolled Agents (NAEA)
The National Association of Enrolled Agents (NAEA) is a professional society that supports its members with resources, education and networking and by representing their interests to government, business and the general public. Members are dedicated to honest, intelligent and ethical representation of taxpayers before the IRS. NAEA powers America’s Tax Experts®.