Be Careful on Claiming Deductions for Casualty and Theft Losses

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I’ve previously done columns on the usual rules for claiming deductions for casualty and theft losses. Claiming deductions for casualty losses might be apropos for those who suffered from recent, unexpected calamities such as the hurricanes in August and September that swept the US Gulf coastal states, Florida and nearby territories.

In this column, we’ll talk about some wrinkles in those rules.

File Claims and Account for Settlements

The IRS requires individuals who seek to write off casualty or theft losses to reduce their deductions to reflect any insurance settlements or other reimbursements that they receive or expect to receive.

Deductions Shrink for Failing to File Claims

It matters not that submitting claims might provide their insurers with excuses to boost deductibles, increase premiums or even cancel coverage.

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About Julian Block

Julian Block

Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com

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