If you suffered unreimbursed losses of more than $500 due to severe storm damage, fire, theft, disaster, or loss on your deposits in 2008, you may qualify for a tax deduction. You must be able to document the extent of your loss and if you were compensated by your insurer, you must subtract the amount of compensation from your overall loss. A short clip from the Insurance Information Institute offers more information:
Kimberly Lankford of Kiplinger’s discusses storm-related tax deductions and points to a helpful casualty loss calculator.
Or you might go right to the source -the IRS provides a variety of publications and tools about available deductions. Here are a few:
Casualties, disasters and thefts – for use in preparing 2008 returns; explains the tax treatment of casualties, thefts and losses on deposits. A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident or similar event. A theft occurs when somebody steals your property. A loss on deposits occurs when your financial institution becomes insolvent or bankrupt. This publication discusses definition of losses, how to figure the amount of your gain or loss, how to treat insurance and other reimbursements, deduction limits, and any special rules.
Tax relief in disaster situations – various resources and fact sheets
Disaster losses – PDF brochure from the IRS