How to Report Casualty Losses, Disasters & Settlements under taxes

Learning Objectives

• To define casualty losses.
• To discuss how to time the loss deduction.
• To analyze the calculation of loss and deduction.
• To discuss section 1033 involuntary conversions.
• To review the taxability of insurance proceeds, settlements, and other relief payments.
• To analyze how to prepare Form 4684.

Course Description

This course is valid up to December 31st, 2023 for CFP Professionals. It is advisable to complete this course before that to process the credit on time.

News-making disasters affect your clients’ tax returns.

Relief is available to taxpayers who’ve suffered these losses, but achieving that relief requires understanding and applying the applicable rules.

There are also significant developments with the IRS in the area of casualty losses and getting those losses properly reflected on Form 4684.

Taxpayers who have suffered losses in declared disaster areas may have opportunities to generate immediate cash savings as well as reduce current tax liabilities.

This requires fully understanding the definitions of and rules surrounding casualty losses and properly applying them. These rules are complex and documentation is difficult, especially when many clients have lost all their records.

This CE Tax Course will cover deducting casualty losses inside and outside of federally declared disaster areas and will also review tax relief for taxpayers affected by the recent disasters.

Although the TCJA eliminated personal casualty losses for the years 2018 - 2025, business casualty losses remain deductible, and personal losses within federally declared disaster areas remain deductible.

This CPE webinar will review the deductible portion of losses, insurance proceeds, settlements, and other relief received that affect the deductible of the losses. It will also include tips on filing Form 4684 and properly reflecting the losses on both personal and business returns.

Key topics discussed in this webinar:

• Deducting Personal Casualty Loss
• Determining the Nature of Loss
• Federally Declared Disasters
• Definition of Casualty
• Determine the Amount of Loss
• What About Covid-19?
• Effect of Insurance Proceeds, Settlements, and Certain Disaster Relief Payments
• When to Report Losses
• Deducting Business Casualty Loss
• Navigating Form 4684

Overview

• Disaster relief provisions of CAA, 2021

  2 mins
• Determining nature of loss

  16 mins
• Cost of repairs mehtod

  27 mins
• Effect of insurance proceeds, settlements, and certain disaster relief

  40 mins
• Limitations on personal casualty deductions

  60 mins
• TIGTA critical of how IRS handles returns with casualty and theft loss deduction

  87 mins