Tax Tips After Facing a Disaster

Disasters are sometimes unavoidable and taxpayers who are victims of a disaster might need to reconstruct records to prove their loss. Doing this may be essential for tax purposes, getting federal assistance, or insurance reimbursement.

Here are 11 things taxpayers can do to help reconstruct their records after a disaster:

·         To establish the extent of the damage, taxpayers should take photographs or videos as soon after the disaster as possible.

·         Taxpayers can contact the title company, escrow company, or bank that handled the purchase of their home to get copies of appropriate documents.

·         Home owners should review their insurance policy as the policy usually lists the value of a building to establish a base figure for replacement.

·         Taxpayers who made improvements to their home should contact the contractors who did the work to see if records are available. If possible, the home owner should get statements from the contractors to verify the work and cost. They can also get written accounts from friends and relatives who saw the house before and after any improvements.

·         For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, the taxpayer can contact the attorney who handled the trust.

·         When no other records are available, taxpayers can check the county assessor’s office for old records that might address the value of the property.

·         There are several resources that can help someone determine the current fair-market value of most cars on the road. These resources are all available online and at most libraries:

o    Kelley’s Blue Book

o    National Automobile Dealers Association

o    Edmunds

·         Taxpayers can look on their mobile phone for pictures that show the damaged property before the disaster.

·         Taxpayers can support the valuation of property with photographs, videos, canceled checks, receipts, or other evidence.

·         If they bought items using a credit card or debit card, they should contact their credit card company or bank for past statements.

·         If a taxpayer doesn’t have photographs or videos of their property, a simple method to help them remember what items they lost is to sketch pictures of each room that was impacted.

For assistance in arriving at loss calculation after a disaster please seek the professional assistance of a knowledgeable accountant.

User | 8/10/2017