By Charlene Quah, CPA, Certified Tax Coach, QuickBooks ProAdvisor
While the full economic impact remains unknown at this point, Risk modeler Chuck Watson of Enki Research said yesterday that he projected total economic loss may reach $42 billion. For taxpayers who have suffered economic loss due to a natural disaster, you can claim a casualty loss deduction on your federal income tax return. Casualty loss, in the past, has earned the highest ranking as the most desirable deduction because such deduction is not subject to the passive loss rules. There are two ways to claim for casualty loss deduction – the appraisal method or cost of repairs method. I am going to provide further details on how you can use one of the two methods in this article today.