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Hurricane Katrina - Businesses Can Claim Casualty Tax Losses

Hurricane Katrina has left a wide and longWith the federal governments delay in rescue
path of destruction. Besides the human toll,operations, your business may have suffered
businesses on the Gulf Coast have taken alosses related to theft. New Orleans, in
beating. If yours is one, here is how you canparticular, seems to have suffered an
write  off  casualty  losses  on  your taxes.outbreak of theft problems. While I can
understand a person taking water and food, I
Casualty  Losses  -  Katrinamust admit I have little empathy for people
stealing television sets. For business
If your business suffered losses because ofowners,  the  distinction  is  irrelevant.
Hurricane Katrina, you can at least write-off
much of the loss. In doing so, you may beTo claim a theft loss for your business, you
able to get a refund of taxes paid earlier inmust  show:
the  year.
1.  When  the  property  went  missing,
Tax law allows businesses to write-off
business property that is damaged or2. A theft took place pursuant to your state
destroyed because of a storm. To claim thelaw,  and
deduction,  you  must  show  the  following:
3.  You  were  the  owner  of  the  property.
1. A specific casualty occurred and when it
occurred,The inevitable question that will arise for
business owners is, "How do I know what was
2. The casualty was the direct cause ofstolen versus destroyed?" Technicalities
Katrina,  andaside, you should claim losses as casualties
unless you have specific proof and a police
3.  You  are  the  owner  of  the  property.report related to a theft. I seriously doubt
the IRS is going to give you much trouble. If
In the case of Katrina, this shouldn't beit does, a judge will laugh the IRS out of
difficult to do. Take pictures of anythingthe  courtroom.
that is a loss and try to compile a list of
everything destroyed or damaged. Obviously,Insurance  Proceeds
this should occur after taking care of your
personal  situation.If you receive insurance proceeds for your
casualty losses, you must apply the proceeds
Importantly, business owners should make sureamount to the loss you are claiming. Sorry,
they claim everything damaged. With thebut  not  double  dipping  is  allowed.
horrific flooding, damaged property may
include not only products but also anythingIn  Closing
that rusts. If your business location is
under water, make sure you investigate theFirst and foremost, get your family and
impact  on  the  property  itself.personal situation in order. Your business
can wait and you will have options once you
Theft  Losses  -  Katrinaget to it.



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