| Hurricane Katrina has left a wide and long | | | | With 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 a | | | | losses related to theft. New Orleans, in |
| beating. If yours is one, here is how you can | | | | particular, 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 - Katrina | | | | must admit I have little empathy for people |
| | | | stealing television sets. For business |
| If your business suffered losses because of | | | | owners, the distinction is irrelevant. |
| Hurricane Katrina, you can at least write-off | | | | |
| much of the loss. In doing so, you may be | | | | To claim a theft loss for your business, you |
| able to get a refund of taxes paid earlier in | | | | must show: |
| the year. | | | | |
| | | | 1. When the property went missing, |
| Tax law allows businesses to write-off | | | | |
| business property that is damaged or | | | | 2. A theft took place pursuant to your state |
| destroyed because of a storm. To claim the | | | | law, 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 of | | | | stolen versus destroyed?" Technicalities |
| Katrina, and | | | | aside, 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 be | | | | it does, a judge will laugh the IRS out of |
| difficult to do. Take pictures of anything | | | | the 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 sure | | | | amount to the loss you are claiming. Sorry, |
| they claim everything damaged. With the | | | | but not double dipping is allowed. |
| horrific flooding, damaged property may | | | | |
| include not only products but also anything | | | | In Closing |
| that rusts. If your business location is | | | | |
| under water, make sure you investigate the | | | | First 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 - Katrina | | | | get to it. |
| | | | |