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IL Estate Planning Blog

Tuesday, April 2, 2019

Recover Your Records after a Disaster

Compliments of the American Heart Association 

Recover Your Records after a Disaster


The year 2018 brought hurricanes, fires, floods and other natural disasters to many American homes. Unfortunately, victims of these types of natural disasters often lose financial and tax records. They also need to substantiate their losses to claim insurance payouts or deduct casualty amounts on tax returns. 

In IR-2018-18, the Service explained how to recover your records and document losses. 
  1. Tax Records - Use the "Get Transcript" tool on www.IRS.gov, or request a transcript with your phone using the IRS2Go mobile app. If you send in IRS Form 4506, Request for Copy of Tax Return, write "California Wildfires" or another disaster title in red letters at the top of the form. The IRS will expedite your request. 
  2. Home and Property - Take pictures of the damage to your home and property. Contact your bank or mortgage lender for copies of documents. Your property tax statement will often show the value of the home and the land. Because the land survives the natural disaster, the casualty loss will be limited to the value of your home. Contact your insurance company and obtain a copy of your policy. Most (but not all) natural disasters are covered by your homeowner's insurance policy. 
  3. Vehicles - Take pictures of damaged or burned vehicles and contact your insurance company. If you have a loan, contact your lender. The value of the automobile can usually be estimated using Kelley Blue Book or edmunds.com
  4. Personal Property - Check your phone for pictures of rooms in your home. Your credit card or bank statements may show the purchase price of furniture and other items. Draw a basic picture for each room and label your furniture. Be sure to include your garage, closets and attic for a complete list of all damage. 
  5. Casualty Losses - You may qualify for an itemized casualty loss deduction if you are in a federally-declared disaster zone and enter the FEMA disaster number on Form 4684. With a federally-declared disaster, you may deduct the loss this year or in the prior tax year. To deduct for the prior year, file IRS Form 1040X, Amended U.S. Individual Income Tax Return. Your casualty loss deduction is generally the decrease in fair market value of the item destroyed. If the cost basis is lower than that amount of decrease, the cost basis is your deduction amount. 
Repair, cleanup and restoration amounts may also be deducted. These costs must not be excessive and should restore the property to the same condition it was in prior to the disaster.

IRS Pub. 547, Casualties, Disasters and Thefts and Pub. 584, Casualty Disaster and Theft Loss Workbook will be of great help if you are a disaster victim.

 

 

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With two offices in Oak Lawn and Oak Brook, Stephen M. Sutera assists clients throughout Cook County, DuPage County and Will County IL including Chicago, Hometown, Barrington, Burbank, Burr Ridge, Chicago Ridge, Darien, Downers Grove, Evergreen Park, Geneva, Worth, Bridgeview, Palos Park, Palos Hills, Palos Heights, Hickory Hills, Midlothian, Willow Springs, Oak Forest, Orland Park, La Grange, Brookfield, Berwyn, Tinley Park, Hinsdale, Villa Park, Clarendon Hills, Westchester, Westmont, Lombard, Elmhurst, Western Springs, Berkeley, Downers Grove, Fox Valley, Glen Ellyn, Willowbrook, Aurora, Addison, Lisle, Forest Park, Bensenville, Wheaton, River Forest, Itasca, Shorewood, Frankfort, Mokena, Naperville, Crest Hill, Homer Glen, New Lenox, Bollingbrook, Schaumburg, Channahon and Woodridge.



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