By topic: Casualty losses

Disaster Strikes: Next Trouble, an IRS Audit

Disasters can happen at any time. As far as your business records go, you’ll be most equipped for a disaster if you’ve backed up and stored your most critical data online. To the extent you fail to do this, you’ll have to get copies of vital records from the IRS and other government agencies, your bank, clients, customers, and others. You’ll have to re-create other data as best you can.

How the TCJA Tax Reforms Hammer Personal Casualty Loss Deductions

The Tax Cuts and Jobs Act makes claiming a tax deduction for a personal casualty loss more difficult. And when you do qualify to deduct a personal casualty loss, you face a number of rules that add to your misery by making the loss deduction difficult. In select circumstances, you can use a safe harbor, which makes things a little easier.

Lost Tax Records Destroy Both Your Time and Your Tax Deductions

Tax law grants relief, if you want to call it that, when you lose your tax records through no fault of your own. For example, say a flood, theft, hurricane, or earthquake caused the loss of your tax records. Your relief is the right to substantiate your deductions using a reasonable reconstruction of those records. Yikes, how long will that take?

Payroll Taxes Embezzled; Owner Has Big Tax Problem

Do you own a business that withholds taxes from employees? If so, you need 100 percent certainty that the withheld payroll tax monies are going to the IRS. You can achieve 100 percent certainty with the IRS EFTPS registration..

Tax Deduction Checklist Should Include Repairs

Learn when to tax deduct flood damage as a casualty loss or repair deduction and avoid capitalization. The law gives business owners an advantage when they fix up their business property after a floor or other casualty.

New IRS Safe-Harbor Tax Relief for Ponzi Scheme Losses

If you are the victim of a Ponzi scheme, you absolutely, positively must read this article to learn how the law gives you favored victim status. This includes a safe harbor election, possible carryback of the losses to one of five years, net operating loss treatment, and more.

Defined Destruction of Home Produces Sale for Exclusion Purposes

At what point is a home destroyed so that it is eligible for the “involuntary conversion rules and the $250,000 ($500,000) exclusion of capital gains rules? In this chief counsel advice, the IRS gives some clarity.

Records Lost in Fire

If your tax records are destroyed in a fire, the IRS allows you to reconstruct the records. Reconstruction takes a big effort. Protect your records so that you don’t have to reconstruct them.

Tax Breaks When You Total Your Vehicle

Tax law calls the wreckage and totaling of your vehicle both an involuntary conversion and a casualty. Special rules allow you to treat the involuntary conversion as either a sale or a trade-in. Thus, your first step in this process is to find your gain or loss and then decide how you want to claim your tax benefits.