Industry News

Tax breaks for property losses

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We've all seen on the news that large portions of the country have been devastated by tornados and floods. Unfortunately, homeowners are not always fully insured -- or insured at all -- against losses due to such events. Fortunately, the Internal Revenue Service can help because uninsured casualty losses are tax deductible.

What is a casualty?

A "casualty" is damage, destruction, or loss of property due to an event that is sudden, unexpected, or unusual. Deductible casualty losses can result from many different causes, including, but not limited to:

  • Earthquakes,
  • Fires,
  • Floods,
  • Government-ordered demolition or relocation of a building that is unsafe to use because of a disaster,
  • Landslides,
  • Sonic booms,
  • Storms, including hurricanes and tornadoes,
  • Terrorist attacks,
  • Vandalism, including vandalism to rental property by tenants, and
  • Volcanic eruptions.