The tax break available for wildfire victims and others who lose property
10:15 AM, Aug 21, 2012
1:49 PM, Aug 23, 2012
TULSA - Wildfires took homes, vehicles and businesses leaving only the charred remains of the lives in their paths.
Many of the victims did not have insurance.
Under IRS tax code, regardless of insurance coverage, loss of property can be claimed as an itemized deduction on tax returns.
Certified Public Accountant Steve Milam explains "What you get to claim as an itemized deduction, as a loss, is treated as a deduction and would offset whatever income you have generated."
Which reduces the total tax bill.
The deduction is based on loss that totals more than 10% of annual income. For example; Milam says if your income is $50,000 a year any uninsured loss over $5,000 is the deduction you could take to offset income tax.
Even those who are insured can get a break based on the losses insurance doesn't cover.
To take the deduction you can use Form 4684 called the Casualty Loss Form.
You can also get free advice from a CPA. Click here to access the "Ask a CPA" site.