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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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We lived in New Orleans during Hurricane Katrina. Because

Resolved Question:

We lived in New Orleans during Hurricane Katrina. Because of the disaster, we had to move to find new work. It was hard to sell our house and we took a big loss. Tax law re: deduction of losses incurred in federally declared disasters changed in 2008. Can I deduct the loss on selling our house in Dec. 2007 (it took 2 years to find a buyer after the hurricane) on my 2008 taxes or amend my 2007 taxes to take the loss?
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

The Housing and Economic Recovery Act of 2008 offers a new option to homeowners who previously claimed a casualty loss deduction resulting from hurricanes Katrina, Rita and Wilma. - http://www.irs.gov/irs/article/0,,id=203056,00.html

  • Allows all taxpayers, not just those who itemize, to claim the casualty loss deduction regardless of the taxpayer's adjusted gross income level;
  • Increases the amount by which all individual taxpayers must reduce their personal casualty losses from each casualty from $100 to $500 for taxable years beginning after Dec. 31, 2008. The reduction amount returns to $100 for taxable years beginning after Dec. 31, 2009;
  • Removes the requirement that the net casualty loss deduction be allowed only if the casualty loss exceeds 10 percent of the taxpayer's adjusted gross income;
  • Provides a five-year net operating loss (NOL) carryback for qualified natural disaster losses.
  • Waives certain mortgage revenue bond requirements for affected taxpayers and allows the bond proceeds to be used for rebuilding.

However - you may not deduct the capital loss for selling your personal property. Please see if any applies to your situation.

Let me know if you need any help.

 

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