Uncle Sam will share our losses in case of disaster, but the rules are more generous for businesses than for individuals.

You can deduct losses resulting from disasters like hurricanes, floods and the like to the extent that they are not reimbursed by insurance. (If you have insurance and don’t file a claim, you can’t take the deduction.) For individuals, the loss is the smaller of the property’s tax basis or its decline in value, less insurance proceeds.  Only itemizers can take this. There are two offsets to deductions: $100 per occurrence, and the rest deductible only so far it exceeds 10 percent of AGI.

For business losses, the offset for individuals does not apply, and non-itemizers also can take the deduction.

In presidentially declared disaster areas, the rules are more liberal. Current losses can be deducted immediately against past returns, as amended, for earlier refunds.

Uncle Sam will share our losses in case of disaster, but the rules are more generous for businesses than for individuals.

You can deduct losses resulting from disasters like hurricanes, floods and the like to the extent that they are not reimbursed by insurance. (If you have insurance and don’t file a claim, you can’t take the deduction.) For individuals, the loss is the smaller of the property’s tax basis or its decline in value, less insurance proceeds.  Only itemizers can take this. There are two offsets to deductions: $100 per occurrence, and the rest deductible only so far it exceeds 10 percent of AGI.

For business losses, the offset for individuals does not apply, and non-itemizers also can take the deduction.

In presidentially declared disaster areas, the rules are more liberal. Current losses can be deducted immediately against past returns, as amended, for earlier refunds.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

http://www.nickersonpa.com/