As the waters recede from Houston, we start to assess the amount of damage caused by Hurricane Harvey. In Harris County 40,000 homes or more may have been damaged by Hurricane Harvey. If you incurred property damage as a result of Hurricane Harvey, you may be able to claim a deduction.
In a prior blog, we discussed how to determine if you have a Casualty Loss. If your damaged property is located in a federally declared disaster area, you have options in claiming a casualty loss:
- You can elect to deduct the loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster occurred as long as the loss would otherwise be allowed as a deduction in the year it occurred.
- You can postpone reporting the gain if you receive more in reimbursements than spent on repairs to your home. This is only allowed for your primary residence.If your home is determined to be unsafe, the state or local government may order you to tear it down.
- You can treat the loss in value as a casualty loss from a disaster. The state or local government must order the tear down within 120 days after the area is declared a disaster area.
- The IRS normally postpones certain deadlines. For victims of Hurricane Harvey, the IRS has extended the deadlines to file certain returns by January 31, 2018, instead of their normal deadlines.
The rules for calculating and deducting casualty losses can be complicated and overwhelming. We encourage you to reach out to us with any questions.
 The Associated Press, https://www.yahoo.com/news/forecast-brings-hope-shelters-open-death-toll-rises-061846372.html
 Internal Revenue Service, https://www.irs.gov/newsroom/tax-relief-for-victims-of-hurricane-harvey-in-texas