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user102154604906
Level 2

Hurricane Irma Deduction

Hello. I'll try to be brief. I need to amend my 2017 return soon if I intend to claim a Hurricane Irma deduction.

Facts:

1. Claimed known related damages on my 2017 return.

1. Actual related damages are now $100k +

2. Claim denied by insurance carrier.

3. Lawsuit filed, but no guarantee of a settlement by April 15, 2021 or at anytime thereafter.

Questions:

1. Must I make and pay for the repairs in order to claim a deduction?

2. Is a repair estimate sufficient for establishing Fair Market Value after the loss?

3. What else does the IRS require to substantiate this type of claim?

4. Any other recommendations?

Thank you in advance for any assistance you can provide!

 

 

2 Replies
KathrynG3
Expert Alumni

Hurricane Irma Deduction

Please check the resources below for more details about proving the amount that was lost and reporting it on your taxes. These resources should answer your questions. The IRS provides guidance for hurricane survivors including lists of tips to establish what was lost.

 

Form 4684 for reporting casualties and thefts will need to be included. Instructions for Form 4684:

Regarding reporting a claim for reimbursement, page 2:

If in the year of the casualty there is a claim for reimbursement with a reasonable prospect of recovery, the loss is not sustained until you know with reasonable certainty whether such reimbursement will be received.  

 

If you aren't sure whether part of your casualty or theft loss will be reimbursed, don't deduct that part until the tax year when you become reasonably certain that it won't be reimbursed. This later tax year is when your loss is sustained.  

 

If you are reimbursed for a loss you deducted in an earlier year, include the reimbursement in your income in the year you received it, but only to the extent the deduction reduced your tax in an earlier year.  

 

Regarding Grants received, Page 5:

Grants and other payments you receive to help you after a casualty are considered reimbursements only if they must be used specifically to repair or replace your property. Such payments will reduce your casualty loss deduction.

If there are no conditions on how you have to use the money you receive, it isn't a reimbursement.  

 

For other information, see: What tax relief can I get if I was affected by Hurricanes Harvey, Irma or Maria?

Florida Hurricane Irma (DR-4337-FL)

 

Then, when you are ready, to report additional losses in TurboTax, follow these steps:

  • From inside TurboTax, in the search box, enter casualty loss.
  • Select the Jump to link from the search results.
  • Answer Yes to Casualties and Thefts.
  • Fill out the next screen with description and date.
    • The FEMA disaster code for Hurricane Harvey is DR-4337.
    • Continue through the prompts.
dmertz
Level 15

Hurricane Irma Deduction

Also see Protective Claim for Refund in IRS Pub 556:  https://www.irs.gov/pub/irs-pdf/p556.pdf

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