When Disaster Strikes: Navigating Casualty Loss Deductions

Tax in Action: Practical Strategies for Tax Pros

Natural disasters, accidents, and sudden destructive events can create significant financial hardship, but the tax code provides some relief through casualty loss deductions. This episode breaks down the complex rules governing what qualifies as a deductible casualty loss, including the critical distinction between personal and business losses under the Tax Cuts and Jobs Act. Jeremy walks through the three-part test for casualty losses, calculation methods using fair market value changes, and the reporting requirements on Form 4684, using a real-world hurricane damage scenario to illustrate these concepts.

Sponsors
SafeSend - taxshow.promo/safesend

• (00:00) - Introduction to the Series
• (01:08) - Understanding Casualty Losses
• (02:57) - Case Study: Jessica's Print Shop
• (05:16) - Types of Casualty Losses
• (06:57) - Tax Cuts and Jobs Act Impact
• (12:22) - Determining Deductible Casualty Losses
• (18:36) - An Identifiable Event
• (27:09) - Determining Casualty Loses or Gains
• (32:04) - Filing an Insurance Claim
• (41:19) - Reporting Casualty Losses
• (50:51) - What to Do For Casualty Gain
• (57:21) - Conclusion and Recap

Connect with Jeremy
https://www.linkedin.com/in/jwellstax
https://www.steadfastbookkeeping.com

Subscribe on YouTube
https://www.youtube.com/@TaxinAction

Earn CPE for Listening to This Podcast
https://www.earmark.app/

This podcast is a production of the Earmark Media