Disaster Resources - University of Illinois Extension

Federal Taxes And The Flood

What You Should Know About Casualty Loss

  • Taxpayers whose principal residence, business or farm (and/or their contents) are damaged as a result of a Presidentially declared disaster can claim a casualty loss deduction on their Federal Income Tax returns.
  • Taxpayers can file casualty loss on their 1995 returns by itemizing or they can amend their 1994 returns.

To File For Casualty Loss, The Taxpayer Should Document:

  • The nature of the disaster
  • Date(s) of occurrence
  • Description and list of property loss (photographs are helpful)
  • Appraisals of property both before and after the disaster
  • List of repairs and their cost
  • Insurance and other reimbursements or compensation received or expected to be received
  • Adjusted basis of property loss (adjusted basis is the cost of the property plus any capital improvements, minus depreciation already claimed)

What's Taxable and What's Not?

All donations and in-kind transfers, such as payments from the Federal Emergency Management Agency for rent, building supplies and food donations, are considered to be gifts and are not taxable.

Publications And Forms For More Information

  • #553 Publication about new tax laws
  • #584 Publication about casualty losses
  • #225 Publication about farm tax laws
  • #4684 Form to file for casualty losses
  • #1040X Form to amend 1994 taxes to include casualty losses

Important Phone Numbers

  • To order publications or forms: (800)829-3676.
  • For information about casualty loss, call the Internal Revenue Service (IRS) and ask for the Casualty Loss Department: (800)829-1040.

Source: Internal Revenue Service

Issued by Holly Hunts, University of Illinois Extension Specialist in Consumer Economics. February 1995

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