Fire Storm Reduction

GIMME A TAX BREAK

Fire Storm Reduction in Property Taxes Assessment

For those residents who lost their homes in the recent fires, our hearts go out to you. Obviously, each family whose home was destroyed had some loss which is irreplaceable. Often, it is an inexpensive but priceless item such as a family portrait.

Our staff is available, without cost, for a consultation with any victim of the fire who wishes to learn what, if any, tax loss that can be utilized to reduce this year’s taxes or recover taxes which were paid in 2006 by amending those returns.

It is a complicated calculation to determine the amount of one’s casualty loss. For your personal home you need to compare the market value of the home immediately before the fire with the value of the raw land after the fire. Then you must take your original cost of the home and add the cost of any improvements which you may have made to the home. Then you must deduct the current value of the vacant lot and the amount of any insurance proceeds which you receive to determine if you have a loss.

If the decrease in market value is more than your recovery from the insurance company, you show that amount less $100 as a casualty loss on your Form 1040 as an itemized deduction. This loss is further reduced by ten (10%) percent of your adjusted gross income. However, in the case of the Katrina Hurricane, Congress waived the 10%, thereby giving the victims a greater loss deduction.

I believe Congress will also waive the 10% for the fire storm.

I also want to remind those of you who lost a house to contact the County ASAP and ask them to adjust the current tax bill, which is due December 10th, and to reflect only the value of the raw land. This will make a substantial difference for the year until you rebuild and get an occupancy permit.

11-01-07