Hurricane IDA - Losses and Deductibility

[moodyfan77]

I have been trying to find an answer to my questions but up until now have been unable to.

Hurricane Ida caused more than an insignificant amount of damage to our home - we needed a new roof, fence, and almost a total replacement to our gutters/soffit/fascia and downspouts. After that, we had some minor repairs we need to take care of.

My first question is that I think I remember reading somewhere that I can take the standard deduction and then ON TOP OF THAT add my casualty loss (form 4684) that was not reimbursed by insurance. What are the steps I need to follow in order to do this if, in fact, my memory is correct? My policy has a 5% hurricane deductible so it is not an insignificant amount of money.

In addition to the casualty loss sustained, I am wondering if we may deduct the loss of use of our home that was not reimbursed by our homeowners' insurance policy? If this is deductible, where would this be entered?

[TeresaM · Accepted solution]

Yes, if you were in a federally declared disaster area, you can deduct your total loss (minus $500 and any amount covered by insurance) along with your usual Standard Deduction, whether you amend 2020 or file as usual for tax year 2021. This means you’ll be able to claim non-reimbursed losses over $500 without having to itemize deductions on your taxes. To enter this information:

1. Please click on Federal on the left menu bar
2. Then select Deductions and Credits from the top
3. Scroll down to Other Deductions and Credits and click on Show More 
4. For Disasters, theft, and other property loss or damage click on Start or Revisit

This TurboTax Help article has additional information and may answer additional questions. Help article disaster relief

Here is a link to the IRS site with information for Tax Relief in Disaster Situations There are multiple entries for Hurricane Ida.

Just to clarify, when you ask about deducting the loss of use for your home, is this money you had to pay to stay elsewhere? Or do you rent out part of the home?

[Mike9241]

see the 4684 instructions for disaster losses starting on page 2

https://www.irs.gov/pub/irs-pdf/i4684.pdf 

[moodyfan77]

Thank you so much for your help Teresa. To answer your question, I was referring to hotel expenses we had to pay while evacuated.

[moodyfan77]

Thank you for the link, Mike. I appreciate it.

[rluby3]

That's not 100% accurate....for Hurricane Ida, you cannot claim the losses if you are taking the standard deduction....only if you are itemizing and only if you exceed the thresholds. 

[HollyTam]

Where can I list my insurance deductible for Hurricane Ida?

[moodyfan77]

When I worked thru our return on TurboTax, the program most certainly did add the casualty losses on top of the standard deduction. Just sayin….

[rluby3]

TT is like anything in... GIGO...its dependent on you answering the questions the right way...I can go into TT or any tax software and get the same result....still doesn't mean it's right. 

Here is the issue...

Hurricane IDA was a Federally Declared Disaster...but it was not a Federally Declared Qualified Disaster....in order to be able to take Ida losses on top of the Standard Deduction it has to be a Qualified disaster, not just a Federally Declared one, which Ida was not.

Think of it like this....all Qualified disasters are Federally Declared but not all Federally Declared disasters are Qualified.  

Senator Kennedy introduced a bill to Congress to elect Ida to be a Qualified disaster but the bill never made it out of committee.

If you look in TT, in the drop-down menu where you indicate the disaster loss, it gives you several options to indicate what type of disaster you are claiming....you have the one indicating it was qualified, which is not correct, and one of the next ones will say federally declared other than qualified, which is the one you should be checking.

[ldavis18]

You comments and info really helps!