We were storing thousands of $$ worth of home & office items at a friend's. Their house burnt down 12/30/21. Can we wait til 2022 taxes to enter casualty losses?

[laceywheeler]

We are still sorting through the damage to see what's salvageable, if anything, and working with insurance to see what's covered. So we don't really have a value to enter for casualty losses yet. Can we still enter the losses on 2022 taxes if the actual loss to fire occurred 12/30/21?

[SweetieJean]

You can no longer claim casualty losses at all unless the fire was the result of a mass event, such as a wildfire or forest fire.  Was there no insurance?  

Tax Laws for Fire and Casualty Loss Tax Deduction | MileIQ

[AmeliesUncle]

No.  It happened in 2021, so it goes on you 2021 tax return.

As was noted above, personal Casualty Losses are mostly not available anymore.  However, you mentioned "office" items, so if you have a business, a business Casualty Loss can be used on the business items.  But as you noted, you really can't do much until you sort things out with the insurance company.

[laceywheeler]

It was the Marshall Fire in CO. It's a federal disaster. We have insurance but insurance will only cover 10% of our losses since the items being stored were not in our home or in a storage facility. So we can deduct the rest. Can we deduct it in 2022 since we don't yet know the extent to which we're covered from insurance? Or can we figure out the insurance thing and go back and amend 2021 taxes?

[Mike9241 · Accepted solution]

the other thing you have to check is if you can file a claim against the other party or their insurance.   the IRS can deny a loss if you have a source for additional recovery.

you can claim the loss in the year of occurrence or the previous year. the loss claimed should be reduced by the expected insurance recovery. if you get more than expected, it's ordinary taxable income in the year received unless you got no tax benefit from deducting the loss. if you get less, the difference is treated as a casualty loss in the year the taxpayer can reasonably expect no more reimbursement

[laceywheeler]

Thank you!!