The federal government provides a tax deduction for real estate casualty losses. This is an itemized deduction, so the ability to use it relates to the specific finances of a taxpayer. Deductions reduce taxable income and the taxes owed, and can therefore be useful to a home owner. This blog provides information on Waltham MA property casualty loss tax deductions.
What Is a Casualty Loss
The Internal Revenue Service considers a casualty loss as the “damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.” It may relate to natural disasters such as tornados or man-made ones such as fire. There are other restrictions provided in IRS Publication 547: Casualties, Disasters and Thefts.
Applicable Tax Year
If the damage took place during an presidentially declared disaster, then you can resubmit your tax return from the previous year to deduct the loss. This will likely result in a tax refund. Otherwise, property owners must hold off until the next tax filing.
First of all, the deduction is strictly available for damage not reimbursed by insurance and other resources. The total of a deduction related to the decrease in market value of real estate resulting from the damage or destruction, the income of the home owner, and various other factors. Federal and state tax laws could differ.
About Information On Waltham MA Property Casualty Loss Tax Deductions
Always reach out to accountant regarding deduction qualifications, determining amounts, and differences with federal and state filings. This blog details information on Waltham MA property casualty loss tax deductions and is intended to education you on potential deductions. It does not by any means imply that you can take advantage of deductions on your specific tax return.