It’s a good time to have comprehensive review of your insurance coverage to ensure that your properties and valuables are adequately protected.
Under current tax law, taxpayers can no longer claim a deduction for casualty and theft loss on their tax return unless it is a casualty loss from a federally declared disaster.
“Generally, you may deduct casualty and theft losses relating to your home, household items, and vehicles on your federal income tax return if the loss is caused by a federally declared disaster declared by the President. You may not deduct casualty and theft losses covered by insurance, unless you file a timely claim for reimbursement and you reduce the loss by the amount of any reimbursement or expected reimbursement.”
The casualty loss could be claimed as having happened during the year immediately preceding the tax year that you incurred the disaster loss and the loss could be deducted on your return or amended return for the preceding tax year.
Take action before it’s too late!
Further reading: IRC sec. 162, 165; IRS Publication 547; IRS Topic No. 515