@wkassin wrote:
Was this by chance addressed in the recent tax bill, and/or is it possible that it will be adjusted at some point to classify it as a qualified disaster? Seems completely ridiculous for those of us that have suffered.
The current language significantly limits the benefit.
HR1 (the one big beautiful etc.) did not modify the casualty loss rules. There was a significant modification the year before, which among other things made wildfire relief payments non-taxable, but nothing changed in 2025.
The Tax Cut and Jobs Act of 2017, which raised the standard deduction and cut rates across the board, eliminated all casualty losses except for those related to a federal disaster.
The law in 2024 (I forget the name) updated this to create 3 different kinds or levels of federal disasters. This is discussed in publication 547.
https://www.irs.gov/pub/irs-pdf/p547.pdf
1. Federal casualty loss. A loss that occurs due to any federally declared disaster.
2. Disaster loss. A loss that occurs due to any federally declared disaster and that is eligible for federal, state or private assistance.
3. Qualified disaster loss. This is a list of specific disaster losses. It includes many losses that occurred before the law was signed, and allows taxpayers to file amended returns to get relief for disasters that were long past. The list of qualified disasters includes some hurricanes, 2017 and 2018 wildfires, and any other major disaster declared by the president that occurred before December 12, 2024. Technically, the disaster event must have started no later than 12/12/24, ended no later than 1/11/25, and was declared by the president no later than February 10, 2025.
It's only the qualified disaster losses that get special treatment.
So in the end, fires that started on 1/25/25 are Federal casualty losses and Disaster losses but not "qualified" disaster losses. Turbotax probably has the date rule built in, and won't let you claim a qualified loss, and if Turbotax did allow it, the IRS would not.
I can't tell you why Congress made those rules and set those dates, but that's how the law is worded. Sorry.
