Hurricanes, floods and tornadoes grab all the headlines, but they aren’t the only events destroying personal property. Your home, for example, may be damaged by water pipes bursting or your car could be totaled in an accident. Those occurrences are also covered under the tax rules for personal “casualty” loss deductions.
With some astute planning and an understanding of the tax rules, you can find the silver tax lining within a dark casualty-loss cloud.
Learn the tax lay of the land
If you fall prey to a natural disaster or some other casualty—including theft—you may be able to write off some of your financial loss. And with the right tax moves, you can earn an even bigger deduction.
For starters, tax law does not place limits for damage to business property. So, you can write off 100 percent of business-casualty losses that insurance or other aid doesn’t cover.
On the other hand, if your personal property is damaged, you ca...(register to read more)