IRS Section 165 allows taxpayers to deduct casualty losses incurred during the tax year that are not covered by insurance or other reimbursements. This deduction applies to losses caused by a sudden, unexpected, or unusual event, such as a fire, storm, flood, or earthquake. When the President declares a federal disaster, taxpayers affected by that disaster may be eligible for additional tax benefits.
Here are a few reference articles that were available before my knowledge cutoff that may provide further insights into IRS Section 165 and federal declared disaster tax deductions:
IRS Publication 547: Casualties, Disasters, and Thefts - This publication provides an overview of the rules for deducting losses resulting from casualties, disasters, or thefts. It explains the requirements, limitations, and procedures for claiming casualty loss deductions, including those related to federal declared disasters. You can find this publication on the IRS website.
IRS Publication 584: Casualty, Disaster, and Theft Loss Workbook - This publication provides a workbook-style approach to help you determine your casualty and theft losses, including those related to federal declared disasters. It offers step-by-step instructions and examples to assist in calculating your deductible losses. You can also find this publication on the IRS website.
Please note that the information provided here is for general guidance purposes only and should not be considered as legal or tax advice.
