This year has seen the occurrence of dramatic casualty events across the country, from tornados in the Midwest, to wildfires in Colorado, Oklahoma, and Texas, to Hurricane Isaac in the Gulf Coast. These and other casualty events have resulted in billions of dollars in property damage. Hopefully, individuals and businesses impacted by these events carried sufficient insurance, including special flood insurance, to be compensated for their property losses.
However, when casualty losses exceed insurance recoveries, tax deductions afford some financial relief to affected taxpayers. Refunds may even be available to provide cash that is helpful for rebuilding after severe losses. What’s more, in some cases, taxpayers can also have more time to complete their tax obligations.
