I see it's the top of the hour, folks. So for those of you just joining, welcome to today's webinar Dealing with Disasters from an Individual Tax Perspective. We're so glad you're joining us today. My name is Evette Davis and I am a Senior Stakeholder Liaison with the Internal Revenue Service and I will be your moderator for today's webinar, which is slated for approximately 120 minutes. This webinar offers two IRS continuing education credits. Participants earn two IRS CE credits and related certificate of completion by attending the live broadcast of this webinar for at least 100 minutes after the official start time and by answering at least four polling questions during the live broadcast. Please note, folks, that the polling question example we're going to do to test your pop-up blocker does not count towards the polling question response requirement of four. 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We are so glad you've joined us today for this webinar. Before we move along with our section, let me make sure you're in the right place. Today's webinar is dealing with disasters from an individual tax perspective, and this webinar is scheduled for approximately 120 minutes from the top of the hour. Today, folks, we are joined by our wonderful speakers, Joe McCarthy and Jeffrey Latessa. Joe McCarthy is a Senior Stakeholder Liaison with the Internal Revenue Service Stakeholder Liaison Field division and has been doing outreach for 23 years. Prior to this, he was a revenue agent with the Internal Revenue Service for over nine years. So Joe has over 28 years of accounting experience and is a certified public accountant. Joe has a Bachelor of Science degree in accounting from Quinnipiac College. Next is Jeffrey Latessa. Jeffrey Latessa also works for the Internal Revenue Service in the Communication and Liaison Division as a Stakeholder Liaison in Lowell, Massachusetts. Jeffrey joined the IRS in 2008. Prior to joining the Communications and Liaison division, he worked as a lead case advocate with the Taxpayer Advocate Service and in Identity Theft Victim Assistance. He has a bachelor's degree in communications from the University of Massachusetts at Amherst and a Juris Doctor from the University of Connecticut School of law. All right, folks, we're in for a great presentation today. So without further ado, Jeff, take it away. Thanks, Evette, and thank you everyone for coming today. Welcome to today's seminar. Today we're going to be dealing with disasters from an individual tax perspective. And while tax issues may not be the first concern of survivors of casualties, thefts, and disasters, eventually your clients may qualify for some of these tax relief provisions. I'm hoping that this presentation serves as a refresher of those relief provisions, as unfortunately, federally declared disaster areas are becoming more common. So today we'll walk you through some tax related issues on disaster relief. I want to familiarize you with a number of different disaster related tax topics. They include identifying types of relief available to taxpayers in a disaster area, calculating disaster area casualty losses, documenting casualty losses in a disaster area, and obtaining information about federally declared disasters. There will be site references for the various disaster topics being discussed on the slides, if you want more detailed information on any specific issue. Let's discuss the types of disaster relief. Please note, for purposes of today's presentation. A disaster area means any area determined by the President of the United States to warrant assistance by the federal government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. You can find out if a weather-related event was designated by the President as a federally declared disaster area online. Federal disaster declarations are posted to FEMA.gov, and some are posted to the IRS website. It's important to note that not all federally-declared disasters are posted to the IRS website, and we'll discuss why shortly. Now, there are two types of federal relief available to victims of disasters. The two main types are administrative relief and tax relief. Tax relief includes deducting casualty losses. There are also safe harbor valuation provisions under Revenue Procedures 2018-08 as well as the election to claim the disaster loss on a prior year tax return under Internal Revenue Code Section 165, which are available to victims of disasters. First, we're going to discuss administrative relief. Now on this slide you can see the different types of administrative relief that can be made available for federally declared disasters. Administrative relief is granted by the IRS in geographical locations designated by the President as federally declared disaster areas and when FEMA designates an area to receive individual or individual and public assistance. We'll talk more about the FEMA individual assistance program later in this presentation. When this happens, the IRS may grant additional time to file returns and to pay taxes. Now the types of administrative relief offered are granting additional time to file certain types of tax returns, like a Form 1040, 1120 or 1065; granting additional time to pay certain types of taxes like estimated taxes; granting additional time to perform time sensitive acts such as making contributions to a qualified retirement plan, filing a petition with the tax court, or filing a claim for credit or refund of any tax. It also gives the IRS the ability to waive or abate interest and penalties, both late filing and late payment penalties. Another type of administrative relief offered by the IRS is the waiving of fees for obtaining copies of tax returns and the expedited handling of requests for copies of tax returns or tax return transcripts. Copies of actual tax returns cost $50 and can take weeks to obtain. Those $50 fees are waived and the tax return requests are expedited. Now, in order to get fees waived and request expedited, you should write the applicable disaster title information, including the disaster number in red at the top of Form 4506, which is the Request for a Copy of a Tax Return, or 456, 4506-T, which is a Request for Transcripts of a Tax Return. Both of those forms are available at the IRS website, IRS.gov. Copies of tax returns and tax return transcripts can be obtained at IRS Taxpayer Assistance Centers with an appointment by phone, by mail, online, or through a tax preparer who is qualified to use the transcript delivery service through IRS e-services. Just so you know, the IRS maintains a listing of zip codes located in federally declared disaster areas. Only Forms 4506 and 4506-T filed with these zip codes can have fees waived. These relief provisions are less important than they used to be due to IRS transcripts being available online for taxpayers with an IRS online account and practitioners being able to quickly obtain transcripts using the IRS e-services Transcript Delivery System. One other note, extensions to file on Form 4868, filed after the original due date of the return but before the postponed due date, must be filed by paper. Administrative relief is granted only to affected taxpayers, so who is an affected taxpayer? An affected taxpayer is generally any individual whose principal residence is located in a disaster area, the spouse of an affected taxpayer when filing a joint return, or any business entity or sole proprietor whose principal place of business is located in a disaster area. In addition, an affected taxpayer is any individual business entity or sole proprietorship not located in a covered disaster area, but whose records are located in the disaster area. Now, there are a few more categories of who is an affected taxpayer, which can be found in the regulations cited at the bottom of this slide, but we've covered main categories. It is important to remember that you don't have to live in a federally declared disaster area in order to be an affected taxpayer. If your spouse lives in a federally declared disaster area, assuming you file a joint return, or you are a taxpayer who is not located in a disaster area, but whose records are, you can qualify as an affected taxpayer. Being an affected taxpayer means that the individual can qualify for any administrative relief provisions we previously discussed, like the granting of additional time to file certain types of tax returns. Let me repeat that because it is important. Being an effective taxpayer means that an individual can qualify for any administrative relief provisions, like being granted additional time to file certain tax returns, pay certain types of taxes, or perform other time sensitive tasks. I think now would be a good time for our first polling question. All right, Jeff, that sounds like a great idea. Okay, audience, here is our first polling question, and this is a yes or no response. Does a taxpayer need to be located in a federally declared disaster area to be granted administrative relief? Select A for yes or select B for no. Does a taxpayer need to be located in a federally declared disaster area to be granted administrative relief? Select A for yes or select B for no. Take a moment, think about what Jeff just talked about, and click the radio button that best answers the question. If you do not receive the polling question, please enter only the letter A or B that corresponds with your response using the Ask Question text box. Folks, your responses are being time-stamped. Please remember that you need to answer at least four polling questions and participate in this live broadcast from the official start time for at least 100 minutes to earn two CE credits from the IRS. The polling question that the example we did at the beginning of this presentation does not count toward the requirement of four questions answered. Okay, I want to give you just a few more seconds to make your selection, and if you need to submit your answer using the Ask Question feature. Okay, let's go ahead, let's stop the polling now and let's share the correct answer on the next slide. Folks, the correct response is B, no and I see that 61% of you responded correctly. So, Jeff, can you help us out? Can you explain to them why B is the correct response, the answer is no. Sure. Just to clarify, the taxpayer does not need to be located in the federally declared disaster area, but they must self-identify with the IRS by calling 866-562-5227 to be granted additional time to file and pay, or they might receive notices from the IRS regarding late filing and late paying. Basically, the IRS puts indicators on the accounts of the taxpayers whose zip codes are located within the disaster area, granting them additional time to file and pay. So if your client is located outside the disaster area, they need to inform the IRS that they've been impacted by the disaster by calling 866-562-5227 and that phone number can be found at the IRS website. I hope that helps to clarify, and I'll turn things over to Joe now. Thanks, Jeff. All yours, Joe. Well, thank you. Now we're getting into a topic that can be a bit confusing because it deals with both FEMA and the IRS, so bear with me. When the President declares a federal disaster, FEMA determines what counties, or if you're in Louisiana, parishes make up the disaster area. FEMA also determines what type of assistance they will offer in the disaster area. FEMA assistance can come in one of three forms; public assistance, individual assistance, or a combination of individual and public assistance. So what is the difference between public assistance and individual assistance? FEMA public assistance is when FEMA provides grants to state and local governments for items like debris removal, repairing roads and bridges, public buildings, and public utilities. On the other hand, FEMA individual assistance is when FEMA provides grants to individuals for items like temporary housing, housing repair and replacement, as well as funeral expenses, just to name a few. Let's go to the next slide to explain why the types of assistance FEMA provides and how the types of assistance FEMA provides have tax implications for individual taxpayers. When the President declares a federal disaster, FEMA will determine what counties. Again, if you're in Louisiana parishes, make up the disaster area. Now, if you look at the chart on the slide, you see that if FEMA designates an area to receive public assistance only, that area will usually not qualify for administrative relief. So, if a disaster has only received public assistance, they're not granted extra time to file their taxes or pay certain tax liabilities or to perform other time sensitive acts. However, if there is a combination of public and individual assistance areas, then in those areas, getting both public and individual assistance will receive administrative relief. And of course, anytime FEMA designates an area to receive individual or individual and public assistance, the IRS will grant administrative relief. Taxpayers can tell if the IRS has provided administrative relief. As discussed earlier, the IRS will typically put out a Press Release or a News Release on the IRS website for disaster tax relief and when individual or individual and public relief are offered, these Press Releases outline the specific types of administrative relief being granted, like postponed due dates for certain tax returns and payment deadlines for certain types of payments as well as casualty loss deductions. Always make sure to check the FEMA website to see if a state has received a federal disaster declaration. This is important because the IRS does not issue Press Releases when a federally declared disaster is announced and when FEMA offers only public assistance, even though public assistance qualifies taxpayers to claim casually lost deductions and that's why it's important to check the FEMA website. Now, due to the Tax Cuts and Jobs Act, all personal casualty loss deductions must be attributable to a federally declared disaster, and the property must be in a state receiving a federal disaster declaration, which may or may not be in the federally declared disaster area. Generally, you must deduct the casualty loss in the year of the loss is sustained. However, if you have a casualty loss with a federally declared disaster that occurred in a state receiving a federally declared disaster declaration, you can elect to deduct that casualty loss in the year immediately preceding the year of the sustained loss. And to make the casualty loss election, you must be; the loss must be attributable to a federally declared disaster and the property must be located within the federally declared disaster area. So let's look at an example of an image of a FEMA disaster map. This particular example is from Kentucky disaster from 2022, and it's for severe storms, straight-line winds, flooding and tornadoes disaster. In this case, the President declared that a major disaster existed in the State of Kentucky. Then FEMA determined the geographical areas covered and you can see that the map is color coded by county. If you look at the sidebar on the map, you'll see that each of these colors represents a different FEMA disaster declaration classification. So let's go through them one at a time. And just so you know, this map is from the FEMA website as all of them are. The white areas on the map are counties not designated by FEMA as federally declared disaster areas. The counties in white would generally not receive any type of administrative relief, for example, late filing of certain tax returns or late payment of certain taxes. However, as the state received a federal disaster declaration, casualty losses that are attributable to the disaster and which meet all the other casualty loss requirements may qualify for the casualty loss deduction, whether or not they are in the designated disaster area. The gold areas on the map are designated by FEMA to receive public assistance only. As such, they would qualify only for tax relief. The brownish areas on the map are counties designated by FEMA to receive individual and public assistance. They would qualify for both administrative relief and tax relief. The IRS issues disaster Press Releases outlining the specific types of administrative relief being made available to taxpayers in those designated counties and the types of tax relief available as well. Again, all IRS Press Releases when the IRS grants, administrative and tax relief are posted to the IRS website. Now, please read these Press Releases closely for the types of relief being offered as postponed filing due dates and postponed payment due dates do not apply to all tax forms and all types of tax payments. Now I think is a good place to check in with the audience. Yep, Joe, I agree with you. All right folks, we just want to make sure you are still with us. So audience, this is an attendance check. Please select the radio button on the screen. If you do not receive the polling question, add only the letter A as in apple as your response in the Ask Question text box to receive your time stamped response. All right, so again, this is an attendance check so please select the radio button A as in Apple and if you don't have the pop-up polling question on your screen, then use the Ask Question text box to time to get a time stamped response. Okay, remember, folks, that we need for you to answer at least four polling questions while participating in this live broadcast from the official start time for at least 100 minutes to earn two IRS CE credits. And again, that polling question example we did at the beginning of this presentation, you've got it, does not count towards this count. All right, I'll give you just a few more seconds to select the radio button or if you need to submit the response in the Ask Question feature. While we're waiting for them to do that, we're going to ask Joe and Jeff, you guys are doing a phenomenal job, but we are asking that if you could just speak up just a little bit more for us. You have such wonderful voices. We want to make sure we are hearing you clearly. So if you could speak a little bit louder so that we can hear everything that you're saying. All right, so now we're going to stop the polling now. Thank you all so much for responding and for participating with the polling questions. Joe, I believe the mic is yours to continue. I'm sure you're saying some great things, Joe, but you're probably on mute right now because we can't hear you. My wife loves it when I'm on mute, so that's what I did that for. Actually, I told three hilarious jokes while I was on mute, but I can't repeat them now because I have to get on with the presentation. So let's turn our attention to personal casualty losses. What is exactly is a personal casualty loss? Well, according to Revenue Ruling 72-592, a casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, and unusual. Now, let's talk about what suddenly unexpected and unusual mean. Sudden means swift, not gradual or progressive. Unexpected means ordinarily unanticipated or unintended. Unusual means not a day to day occurrence and not typical of the activity in which you are engaged. The terms sudden, unexpected, and unusual are used to describe the characteristics of a casualty, and they were established through various Revenue Rulings and court cases. Recently, as we have discussed, casualties have occurred in disaster areas where there have been hurricanes, wildfires, tornadoes, earthquakes, and floods. These weather related events have been determined to be sudden, unexpected, and unusual and therefore, the damage, destruction, or loss of property resulting from them meet the definition of a casualty. Now, let's talk a little bit about computing a casualty loss or casualty losses. A casualty loss is the lesser of the adjusted basis before the disaster or the decrease in the fair market value as a result of the disaster decreased by any insurance or other reimbursements. There are a few things that one needs to remember when it comes to loss reimbursement. If in the year of the casualty there's a claim for reimbursement and there's a reasonable prospect of recovery, no portion of that loss that may be reimbursed is allowed. So you must reduce your loss even if you do not receive the payment until a year later. If your property is covered by insurance, you must again, I'm going to repeat, you must file a timely insurance claim for reimbursement of your loss. Otherwise, you can't deduct any reimbursement for the portion of the casualty. So let's talk a little bit about valuing your casualty loss and the methods by which you may be able to do so. Now, there are two main methods for determining the amount of a decrease in the fair market value. The first method is done by a competent appraisal. The appraisal must recognize the effects of any general market decline affecting undamaged, as well as damaged property which may occur simultaneously with the casualty, so that any deduction under the section shall be applied to the actual loss resulting from the damage to the property. The second method is by cost of repairs that you actually make. The cost of repairing damaged property isn't part of the casualty loss, neither is the cost of cleaning up after the casualty, but you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in the fair market value, if you meet the following conditions; the repairs must actually be made, the repairs must be necessary to bring the property back to its condition before the casualty, the amount spent for repairs is not excessive and the repairs take care of the damage only, and the value of the property after repairs isn’t due to the repairs more than the value of the property before the casualty. Okay, there are some also some other methods of determining the decrease in fair market value. They are safe harbor provisions as discussed in Revenue Procedure 2018-08. They are the estimated repair cost method, which requires that you use the lesser of two repair estimates. The estimates must detail the itemized cost to restore your property to its condition immediately before the casualty, the limit of the casualty losses of $20,000 or less, and it is for personal use, residential real property only. And there is also the de minimis method, which requires a written, good faith effort of cost repairs required to restore your property to its condition immediately before the casualty and this is available for casualty losses of $5,000 or less, and it is also for personal use, residential real property only. Then there is the insurance method. It is based on the estimated loss in reports prepared by your homeowners or flood insurance company. These reports must set forth the estimated loss you sustained from the damage or destruction of your property; and again, this is for personal use residential real property only. Then there is the safe harbor; I'm sorry, the contractor safe harbor. This uses the contract price for the repairs specified in a contract prepared by an independent and licensed contractor to determine the decrease in fair market value. It requires a binding contract signed by the taxpayer and the contractor setting forth the itemized cost to restore the property. And again, just like the other ones, it is for personal use residential real property only. Then there is the disaster loan appraisal method. It requires an appraisal prepared to obtain a loan for federal funds or a loan guarantee from the federal government that identifies your estimated loss. And it's for personal use, residential real property only. Then there is the de minimis method and this is for personal belongings. It uses a good face estimate to decrease in the fair market value of your personal belongings and this is limited to losses of $5,000 or less. And finally, the replacement cost method. Again, it's for personal belongings. It uses the current replacement cost of the property reduced by 10% for each year you have owned the property. These safe harbor valuation methods can be used instead of having a competent appraisal or using the cost of repairs. And again, that is Revenue Procedure 2018-08. So, if you're interested in using any one of these provisions, I would highly recommend that you look at Revenue Procedure 2018-08. Now I believe we have another polling question. You are exactly right, Joe. Okay folks, here we go with our third polling question. And this is a true or false question for you. True or False; In 2023, you must itemize your deductions to claim a casualty loss? Select A for true or select B for false. Take a moment. Click the radio button that best answers the question. Remember, if you do not receive the polling question, please enter only the letter A or B that corresponds with your response in the Ask Question text box. Your response, folks, is time stamped. Please also remember that you need to answer at least four of these polling questions while participating in the live broadcast from the official start time for at least 100 minutes to earn two IRS CE credits. The polling question example that we did at the beginning of this presentation does not count towards the requirement. Okay, want to make sure you have enough time to respond and answer the question. Okay. All right, let's go ahead and stop the polling now and let's share the correct answer on the next slide. And the correct answer is A true. And it looks like 64% of you responded true. Joe, can you give us some help here and explain why true is the correct response? Okay, hold on 1 second. Let me get back to where I was. Yes, because of the Tax Cuts and Jobs Act, any individual casualty loss has to meet certain restrictions and one of those restrictions is that you must itemize your deductions in order to claim a casualty loss. Again, the Tax Cuts and Jobs Act expires in 2025, at the end of 2025, so depending on what happens if Congress extends it or doesn't will determine whether this particular rule is carried forward in the years post 2025. Awesome. Thank you so very much. Okay, audience, we appreciate Joe, we appreciate Jeff, and hopefully you are following along and you are able to understand the response and we appreciate your listening. All right, let's move along. I'll turn the mic back over to Jeff. Thanks, Evette. Now we're going to talk about the personal casualty loss deduction. Losses of personal use residential real property are calculated on Form 4684 and are subject to two general limitations; one, a casualty loss is allowed only to the extent that the amount exceeds $100 and, two, the casualty loss must exceed 10% of adjusted gross income. Both of these rules must be met in order to claim a casualty loss. In addition, the taxpayer must itemize their deduction in order to claim a casualty loss. No deduction is permitted in a tax year for the loss or any portion of the loss when a claim for compensation is outstanding for which there is a reasonable prospect of recovery. Also, taxpayers who deduct a casualty loss attributable to a federally declared disaster must include the FEMA disaster declaration number on the Form 4684. Major disaster declarations begin with the letters DR followed by four numbers identifying the disaster. Now, there are three other less common types of FEMA declarations. There are emergency declarations which qualify for the disaster casualty loss deductions under Internal Revenue Code Section 165. There are fire management declarations which are ineligible for the casualty loss deductions, and fire suppression authorizations which are also ineligible for casualty loss deductions. Again, these last three types of FEMA declarations are less common, so unless your clients live in fire prone areas, you're unlikely to see them. I want to talk a little bit about computing a casualty loss. We have an example on the screen from IRS publication 547 on how to compute one. In this example, a tornado destroyed a home, and the tornado was attributable to a federally declared disaster and located in a presidentially declared disaster area. The home cost $144,800 when it was purchased several years ago. This was the only casualty or theft loss for the year. The fair market value of the property immediately before the tornado was $180,000. Unfortunately, the fair market value immediately after the tornado was $35,000, basically, the cost of the land. The loss is $144,800, which is the lesser of the adjusted basis of the property or the decrease in the fair market value before the insurance reimbursement. The taxpayer then collected $130,000 from the insurance company, which is going to reduce their loss. Their loss is further reduced by $100 and 10% of their adjusted gross income, which is $80,000. This means their deductible casualty loss is $6,700, which is deducted as an itemized deduction on their tax return. Once you claim a casualty loss, you are not done. If you claim a casualty loss, you must adjust your basis in the property. To do so, you would decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. The result is your adjusted basis in the property. Increase your basis in the property by the amount you spend on repairs that substantially prolong the life of the property, increase its value, or adapt it to a different use. To make this determination, compare the repaired property to the property before the casualty. I highly recommend and encourage everybody to take a look at Publication 547, Casualties, Disasters, and Thefts. It has a lot of examples and scenarios for computing your casualty loss configuring the deduction. As I previously mentioned, due to the Tax Cuts and Jobs Act, all personal casualty loss deductions must be attributable to a federally declared disaster and the property location must be in a state receiving a federal disaster declaration which may or may not be in a federally declared disaster area. Generally, you must deduct a casualty loss in the year that the loss is sustained. However, if you have a casualty loss from the federally declared disaster that occurred in a state receiving a federally declared disaster declaration, you can elect to deduct the casualty loss in the tax year immediately preceding the year of the sustained loss. To make this election, the casualty loss deduction must be attributable to a federally declared disaster and the property must be located within the federally declared disaster area. If you make this election, the loss is treated as having occurred in a preceding tax year. You must make the choice to take your casualty loss for the disaster in the preceding year on or before the date that is six months after the regular due date for filing your original return without extensions for the disaster year. If you've already filed your return for the preceding year, you can elect to claim a disaster loss against that year's income by filing an amended return. Individuals file an amended return using Form 1040X. To make the election, you complete part one of Section D on your prior year Form 4684, and attach it to the amended return that claims the disaster casualty loss deduction. Taxpayers may be looking towards you, the tax professional, to determine whether it is in their best interest to claim any disaster related casualty losses in the year of the casualty loss or elect to claim the casualty loss the year preceding the casualty loss. You'll have to make that determination on a case by case basis. Now I'll hand things back over to Joe. Well, thank you, Jeff. Revenue Procedure 2016-53 outlines the procedures and requirements on how to make the election to deduct the casualty loss in the year prior to the loss. But remember, the election to deduct a casualty loss in the year prior to the casualty is available for casualty losses located in a federally declared disaster area only. So, there's a distinction. If you're claiming it in the year of the loss, it does not have to be in the declared disaster area, it just has to be in the State. But if you're electing to go the prior year, then it must be in the federally declared disaster area. So, in order to make this election, a taxpayer must include with the original federal return or amended federal return, an election statement indicating that the taxpayer is making a 165(i) election. The election statement must contain the following information; the name or description of the disaster and the date or dates of the disaster which gave rise to the loss; the address, including the city, town, county, parish, state and zip code where the damaged or destroyed property was located at the time of the disaster; and you will need to include the FEMA declaration number, which you can find on the FEMA website and also sometimes on the IRS websites. Now let's touch on documenting a casual loss. You should always attempt to keep records to support your loss. Reconstructing records after a disaster may be essential for tax purposes, for getting federal assistance or insurance reimbursement. After a disaster, homeowners might need certain records to prove their loss. The more accurately the loss is estimated and documented, the more loan and grant money may be available. This slide reviews documentation recommended to support a casualty loss claim. Please note that this list is not all inclusive, but covers general information needed in order to document a casualty in a federally declared disaster area. Added documentation will depend on the type of asset involved, so you should probably be taking photographs as quickly as possible after the event to establish the extent of the damage. You may want to see if there are any pictures that exist showing the property before the damage occurred. Maybe contact a title company or a bank that handled the purchase of your home for copies of escrow papers. But probably the best way of documenting loss is by taking video of your home both inside and outside your home. There are some cases where you might be able to have enough advance warning of a severe weather event, like a hurricane, that might be coming in your direction. In that case, making a video while walking around your house before the disaster strikes and then making another video after the disaster may prove some of the best documentation you can get for tax purposes and insurance purposes. Now I want to pause for another polling question. Okay, Joe, you've got it. Audience, take a moment to answer our fourth polling question, which is documenting records for casualty losses can include: A, photographs of damaged property; B, videos of damaged property; C, written competent appraisals of damaged property; or D, all of the above. Think about what you just heard from Joe. Take a moment. Click the radio button that best answers the question. If you do not receive the polling question, please enter only the letter A, B, C or D that corresponds with your response in the Ask Question text box. Your response, folks, is time stamped. So please remember that you need to answer at least four polling questions while participating in this live broadcast from the official start time for at least 100 minutes to earn those two IRS CE credits. The polling question example, once again, that we did at the beginning of this presentation, you got it, does not count towards the requirement of four polling questions answered. Just trying to give you a few more seconds to make your selection and if you need to submit your response in the Ask Question feature in that text box. Okay, let's go ahead and let's stop the polling now and let's share the correct answer on the next slide. And folks, the correct response is, D, all of the above, and I see that 99% of you responded correctly. You've got that, folks. I love it. Joe, I think they were listening to you very attentively. Jeff, over to you. Thanks for that 99%. That is great. Good job, Jeff. So what we're going to go over now are what forms to file. So how you report gains and losses depends on whether the property was a business income producing or whether it was your personal use residential real property. If you have personal use residential real property and a casualty loss, you would complete a Form 4684, Section A and Form 1040, Schedule A. Also, if you have a gain on a casualty loss, you'd report it on your Form 4684 and on Schedule B. And if you've already filed your return for the preceding year and you elect to claim a disaster casualty loss on the prior year return, you would file an amended return Form 1040X. Switching topics, there are some disaster related payments that are not included in gross income. Right now we are going to talk about disaster relief payments. Qualified disaster relief payments are not included in gross income to the extent any payment is not compensated for by insurance or otherwise. So if a taxpayer receives a qualified disaster relief payment and does not receive any insurance or other reimbursement for the disaster related expense, the relief payment is not included in gross income. There are three different types of qualified disaster relief payments. The first type of disaster relief payments, our payments to reimburse or pay reasonable and necessary personal, family, living or funeral expenses incurred as a result of a qualified disaster, also known as a federally declared disaster. These types of payments are excluded from gross income. For example, if a taxpayer's home is completely destroyed by a tornado and they receive funds which don't include insurance proceeds to temporarily put them up in a hotel, those payments are not includable in income. The second type of disaster relief payments are payments incurred for the repair or rehabilitation of the personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster. So, assuming that a taxpayer does not receive any insurance or other reimbursements for these expenses, the payments would be excluded from gross income. For example, if a taxpayer did not have flood insurance for their home but received funds to help replace the carpet and drywall of their home, those funds would be excluded from income. And finally, disaster relief payments or grants paid by a federal, state, or local government or agency related to a federal disaster, which are based on need are excluded from gross income. Two other items not shown on the screen are payments made by charitable organizations or employers. These payments can also be excluded from gross income. However, no double benefit related to qualified disaster relief payments is allowed. This means that no deduction or credit will be allowed to the extent of the amount of any qualified disaster relief payments that are excluded from income. Remember, excluding qualified disaster relief payments from income applies only to individuals. These exclusions from income do not apply to business. And before we move on, let's check in again with another polling question. All right, Jeff, thank you. That works for me. Okay, audience, this is another attendance check, so please select the radio button on the screen. And remember, if you do not receive the polling question, add only the letter A as your response, using the Ask Question text box to time stamp your response, okay. And also, folks, remember that you need to answer at least four polling questions while participating in this live broadcast from the official start time for at least 100 minutes to earn those two IRS CE credits. And again, just another reminder, the polling question example we did at the beginning of this presentation, yep, you've got it, does not count towards this requirement of four. Want to make sure you have enough time to select that radio button or enter the letter A as your response in the Ask Question text box; wanted to give you a few more seconds to make that choice. Okay, so let's go ahead and stop the polling now. Thank you for responding and for participating with the polling questions. Jeff, it looks like the audience is with you, so we are excited about that. And Joe, so I'll turn it over to you to continue. Thank you, Evette. Okay, we discussed the tax treatment of qualified disaster relief payments. Now we're going to discuss the disaster mitigation payments. Now, I know that relief payments and mitigation payments sound like they're the same thing, but they are different. Qualified disaster mitigation payments are any amount which is paid pursuant to the Robert T. Stafford Disaster Relief Act or the National Flood Insurance Act, or for the benefit of the owner of any property for hazard mitigation. Let's look at some examples of qualified disaster mitigation payments to highlight what these payments are for and how they're treated for tax purposes. Qualified disaster mitigation payments are payments made by FEMA to taxpayers under the FEMA Disaster Mitigation program. They include Flood Mitigation Assistance program, which provides funding to protect life and property from repetitive future natural disasters; Hazard Mitigation Grant program, which provides post disaster funding to protect life and property from future natural disasters. Now, these are payments that individual property owners receive from FEMA to reduce the risk of future damage to their property. Qualified disaster mitigation payments are excluded from gross income. In addition, qualified disaster mitigation payments do not increase the basis of the property for expenditures made with respect to those payments, so no deduction or credit is allowed related to the qualified disaster mitigation payments. However, just like qualified disaster relief payments, no double benefit related to the qualified disaster mitigation payments are allowed. So on this slide, we will discuss the tax treatment of gains on unscheduled personal property. No gain is recognized on any insurance proceeds received for unscheduled personal property that was part of the contents of a main home. An unscheduled property insurance payment is the lump sum insurance reimbursement received for the contents in a home or apartment that was involved in a disaster. Usually, an insurance company will list in this policy what types of property must be scheduled, such as high value jewelry or high-end technical equipment. This income exclusion applies to both homeowners and renters who receive insurance proceeds for damaged or destroyed property in a home or apartment as a result of a federally declared disaster. So, taxpayers who receive insurance payments or reimbursements for unscheduled property, no gain is recognized on that property. So some examples of unscheduled property would include clothing, bedding, small electronics, sports equipment, and jewelry of minimal value. They would be examples of unscheduled property. So let's say an insurance company gives you $500 for a TV that may have actually been worth $300, no gain is recognized on the TV. That's what this particular provision means. Also, payments for temporary living expenses received by an insured individual directly from FEMA and that's the key, the payments for temporary living expenses have to be directly from FEMA are also excluded from gross income. Evette, do we have time for another polling question? Absolutely, Joe, we certainly do. Okay, audience, we have another yes or no question, and here we go. Are disaster mitigation payments taxable and do they impact basis? Select A for yes or B for no. Are disaster mitigation payments taxable and do they impact bases? Select A for yes or select B for no. Take a moment, click the radio button that best answers the question. Remember folks, if you do not receive the polling question, please enter only the letter A or B that corresponds with your response in the Ask Question text box. And remember folks, also that your response is time stamped and that you need to answer at least four polling questions and participate in the live broadcast from the official start time for at least 100 minutes to earn two CE credits from the IRS. The polling question example we did at the beginning of this presentation, you know it by now, does not count towards the requirement of four. Just wanted to give you a few more seconds to make your selection and if you need to submit your response in the Ask Question feature. Okay, let's stop the polling now and let's share the correct answer on the next slide. And folks, the correct response is B, no, disaster mitigation payments are not taxable and they do not impact bases. And let me see what percentage of you responded correctly. Okay, okay, that's great. We have an 81% of folks who responded correctly and I do hear a bit of an echo, not sure why, but 81% responded correctly. So I think we're good to go with this question. So Jeff, I'm going to leave it over to you so that you can continue. Thanks Evette. There's just a few more things that I wanted to touch on, including disaster related publications that are available. The IRS provides resources for taxpayers and for tax professionals, and I would encourage everybody to take a look at these related disaster publications on the slide that's being displayed right now. And of course, the Form 56; I'm sorry, the Form 4684 and its instructions, those are very helpful. The IRS website also has a lot of helpful information related to disasters and we also have information related to other government agencies. I would recommend checking FEMA.gov to see if the disaster was in your county or parish. The maps are extremely helpful on the FEMA website for that purpose. Now, we know that there's a great deal of complexity associated with disaster tax relief, but I hope you found this material today helpful in dealing with some of those intricacies. And while taxes may not be the first concern of survivors of casualties, thefts, or disasters, eventually they will need to know the resources available to them. Evette, how about one more polling question for the room? I think you are right on point, Jeff. Let's go ahead and get this done. Audience, here is our final polling question, and it is another attendance check, so please take a moment. Click the radio button on the screen. If you do not receive the polling question, add only the letter A as your response in the Ask Question text box so that you can have a time stamped response, okay. Remember also that you needed to have answered at least four polling questions while participating in this live broadcast from the official start time for at least 100 minutes of IRS CE credits, that's to earn two IRSCE credits. Okay, the polling question example we did at the beginning of this presentation, say it with me, does not count towards this requirement of four. I want to make sure everybody has enough time to select the radio button A or if you need to submit the letter A in the Ask Question text box. Okay, let's go ahead and let's just stop the polling now. Thank you folks once again for responding and for participating with the polling questions. Now we're going to move on into our question and answer session. I'll be moderating the Q&A session. But before we start this session, I do want to thank everyone for attending today's presentation dealing with disasters from an individual tax perspective. Now, earlier I mentioned we want to know what questions you have for our presenters and here is your opportunity. If you haven't already input your questions, there is still time. So go ahead, click on the dropdown arrow next to Ask Questions, type in your question and remember to click send. Joe and Jeff, our esteemed presenters, are staying on with us to answer your questions. But one thing before we get started, we may not have time to answer all the questions submitted, but we will answer as many as time allows. Let's go ahead and get started so that we can get to as many questions as possible. And Jeff, I'm going to come over to you to get things started for us. Okay, so this first question is as follows. You mentioned a phone number to self-identify if you reside or have a business located outside the covered disaster area. Could you repeat the number? And if you could just expand on that just a little bit for us as well. Sure. To self-identify, you would call the IRS disaster hotline at 866-562-5227 and you would call that if you reside or have a business located outside the covered disaster area to request postponed filing and payment due dates. Now, that number, you can write it down, but you don't need to remember it because that will also be on the IRS federal disaster Press Releases, which are going to be posted on the IRS website, but I'll also repeat it one more time. It's 866-562-5227. Awesome. Thank you, Jeff. And folks, remember a lot of the information that you're hearing today. You can find that on our website at www.IRS.gov and just do a quick keyword search. Okay, thank you, Jeff. So while we're here, there's another question for you, Jeff. This person wants to know, okay, let's see; why didn't you cover qualified disasters during the presentation? That's a fair question. Yeah, that's a very good question. So, qualified disaster losses were not covered in this presentation since there haven't been any qualified disasters since 2021. Qualified disasters are different from regular federally declared disasters. Qualified disasters pertain to a handful of very specific disasters, including hurricanes Harvey, Irma, and Maria, as well as some specific California wildfires back in 2017 and 2018. But since there haven't been any qualified disasters since early 2021, they were not covered during this presentation. Okay, sounds good. Sounds good. Thank you so much, Jeff, and I'm just going to stick with you, if you don't mind. I'm not picking on you. Is the cost of an appraisal used to determine the value of property before and after a disaster deductible as part of the casualty loss? Yeah, that's another good question. The cost of appraisals used as evidence of the value in condition of the property damages as a result of a disaster related casualty aren't a part of the loss. They're expenses in determining your tax liability, so for tax years 2018 through 2025, they cannot be deducted as miscellaneous itemized deductions. Okay. Awesome. Awesome. Okay, thank you. Very good. These are some great questions, Jeff. All right, another one for you, Jeff. Can you deduct a casualty loss on a second home? Now, I've seen this question in the queue several times, so they're very interested in this question. Yeah. And the answer to that is, the casualty loss on the second home might be deductible if the second home is only used for personal use and is not a rental property and meets all of the other conditions of a casualty loss. For example, the loss is in a federally declared disaster area, the loss is attributable to that disaster, the value of the property before and after the disaster has been determined, among other things, then the casualty loss would be deductible. Awesome. Excellent. Thank you so very much, Jeff. Okay, I'm going to pass the ball, since we're in football season, please forgive me, you all. I'm going to pass the ball over to Joe. So, Joe, if you don't mind, we're going to ask you a few questions as well, sir. Can you hear me? Oh, no, not me. I knew you were ready. I knew it. Okay, so this is the first question. Does disaster relief extension apply to 1040X? I would say the general answer to that question is yes, but what I would caution is please read the Press Release related to that particular example or that particular disaster in order to determine if, in fact, the disaster; the postponed due date for the 1040X is actually covered by the postponed due date. So again, general rule, if you live in a disaster area and is receiving public and individual or individual assistance, the granting of postponed filing due dates is most likely going to cover the 1040X. However, please read the Press Release on the IRS website very closely to make sure that the 1040X is covered. Awesome. Thank you, Joe. All right, sticking with you. How do you file for a disaster deduction if you do not itemize deductions? Okay, got a little problem there because if you're claiming a casualty loss, you know you have to meet certain hurdles. You have to make sure that the casualty loss is computed properly. You have to make that insurance claim if in fact, you are covering insurance or covered by insurance, I should say, and in addition to that, you have to reduce the loss by $100, and the loss has to exceed 10% of your AGI, and in order to claim it, you must itemize your deductions. Again, we haven't had a qualified disaster that would allow you to claim your casualty loss deduction on top of your standard deduction since 2021, and most of them were back in 2017 and 2018. So if you have a casualty loss and that casualty loss does not rise to the extent that your itemized deductions would exceed your standard deduction, you're basically not going to claim the casualty loss on your tax return. Excellent. Excellent. Okay. Very good, Joe. All right, we are on a roll, folks. Here we go. We're going to get to as many as we can. This question is as follows. Where do I find the federally declared areas of a State like California? Okay, so there's basically two ways of going about doing that. The easiest way is probably going to the FEMA website, and you would find your declaration of your specific disaster, and then they will have a map of the counties that are covered in that disaster declaration. The other way that it can be determined is if individual and individual and public assistance are offered and the IRS issues a Press Release, the Press Release will outline the counties and/or parishes that are designated by FEMA for under the federal disaster declaration. So again, easiest way, if you want to make it nice and easy to look at a map like we had during the presentation, I would go right to the FEMA website, look at your particular disaster, and then go to the map, and it will show you all the counties that are covered. As an alternative, again, if an IRS issues a Press Release on the disaster, they will list the counties and/or parishes that are impacted under the disaster declaration. But again, remember, we do not issue Press Releases for every single disaster, we only issue Press Releases when there is individual assistance or individual and public assistance granted by FEMA. Yes. Awesome, awesome. Great, great. Okay, thank you, Joe. So next question. When e-filing a tax return for a taxpayer qualifying for a disaster related additional extension of time to file, is a special header required to be added to that e-filed return? Okay, so generally speaking, when you go into your tax software, one of the questions that they're going to ask for is, you know, is this a disaster related e-file? And if you check the box, yes, it's going to ask for the disaster declaration number. And if you have a disaster; like a normal federally declared disaster, it's going to start with the letters DR and followed by four numeric characters. And at times the FEMA also declares what they call emergency measures, much less common. But those you would input, instead of putting DR and the disaster number, you would put EM and the disaster number into the tax software and file the return that way and that way, the IRS recognizes that it is a return that's being filed and claiming some sort of disaster related provisions, either the postponed filing due dates or the extended payment due dates. Okay. Awesome, awesome. So does the declared disaster area have to be federal or could it be state declared only? That's a good question and I'm glad they asked it. It must be a federally declared disaster in order to be granted either administrative relief or tax relief. So if the state declares a disaster and it's not declared by FEMA, and it's not signed off by the President of the United States, you are not going to be availing yourself to either postpone filing or payment due dates or claiming a casualty loss on your tax return. And now if the state declares a disaster and the FEMA also declares a disaster that covers the same area, then you're good. But if it's the state only declaring a disaster area, then you would not be able to avail yourself of postponed filing or payment due dates or claiming a casualty loss on a tax return. Very good. Very good. Yeah, that was a great question. So, okay, so if they have a county that is declared a federal disaster area, but they're not personally affected, the question is, can you still take advantage of the delayed filing? Okay. And the answer to that is maybe if you are an affected individual, you can, and in order to do that, you're going to have to self-identify with the IRS because if you don't self-identify and you're outside the federal disaster area, we're going to think, you just made a late payment or you just made a late filing, so you have to self-identify. And the phone number for that in order to self identify is 866-562-5227. Let me give you that number again, it is 866-562-5227. And just be aware that if you weren't writing it down quick enough or you're going to forget another five minutes, I would go to the IRS website, look for the Press Release, and the Press Release is going to give you that number. It's going to basically say, are you an affected individual? Yes, you are, call the 866-562-5227 phone number and you self-identify as an affected individual, and you qualify for postponed filing due dates. Very good. Very, very thorough. Thank you, Joe. Okay, so now the next two questions are in reference to transcripts, okay, documents and all of that. Can you get transcripts more than three years old with the 4506 because with e-services, you can only go back three years? Okay. And that's a very good, very good observation. With the IRS e-services, I think it's the current year and the three prior years, but with 4506, and it shows usually because it's a; you're looking for a transcript, at 4506, you can go back, I believe they go back seven years. So, if you actually file the paper document with the IRS, I believe you can go back seven years for transcripts. And if you happen to live by, near a IRS walk-in unit, you can make an appointment as long as you have a power attorney for your client, and I believe that they would be able to go in and go back and get seven years worth of transcripts as well. Okay. Okay. Very good. Okay, now hang in there with me with this question, Joe. We've got a little bit of background here, okay. This person says that they have a client; they have a client that was, they were defrauded over $1 million. They were under the impression that they were under investigation by the federal government for fraud, yeah. They were instructed to liquidate their IRA and transfer the money to a different account. Unfortunately, these guys were not part of the federal government. The client has now has none of their life savings remaining. And under the TCJA, Tax Cuts and Jobs Act, we understand you cannot deduct for theft related losses. However, I have reviewed the exceptions for the Ponzi scheme. Given that our clients have no money to pay the almost $300,000 tax, how do we report this? We have called IRS multiple times and not received a clear answer. The client only has a home and their remaining asset, as their remaining asset and the house itself will barely cover the tax due. And note that this was not in a federally declared disaster area. Well, first of all, I don't know who asked that question, but whoever it is, I feel awful sorry for your client. You know, this scams are out there and I just want to stay something right up front. You know, the IRS is never going to contact your client by social media, TikTok, we're not going to call you on the phone. You would have to be; anytime your client is notified by the IRS, they are going to receive a letter first. The only time that that will not happen is if they have moved and we are going to their address of record and using their phone number. But generally speaking, the IRS will only contact your clients by letter first and once they do that, then we can contact them by phone, but we won't contact you by email. We're not going to contact you by social media or anything like that. And we are certainly not going to ask you to show up in a Wal-Mart parking lot with prepaid debit cards, okay. So now that I've got off that, to the person that asked the question, I am going to say the first thing you want to do is you want to go to Publication 547 and look at the revenue procedures that are quoted related to the Ponzi scheme. Now, Ponzi schemes are pretty; are different than just scams. So, I don't think based on the information that you provided, that they're going to qualify to deduct a loss, they're going to have to report the withdrawal of their money from the IRA as income. The couple of things that I would advise you to do is if your client has assessed a penalty, then I would advise you to look at IRM Section 20.1, again, that's IRM Section 20.1, and look at the provisions for the first-time penalty abatement. The next thing you might want to consider is after filing the return and after the assessment is made, is filing an offer and compromise. And again, you can go to the IRS website to get more information on that. And sometimes the IRS, given the proper conditions, will settle a debt for less than it is outstanding. But the first thing you want to do is if you can get the; if there is a penalty, if you can get that abated, that's going to lower the amount that's going to be in that offer and compromise. So again, I'm very, very sorry for your client, but I will look at IRM Section 20.1, and I would also look at the provisions for an offer and compromise doubt as to collectability. I hope that helps out. Yeah, that's really, that's a great response, Joe, and our hearts go out to you and your clients who are dealing with this. Yeah, that's tough. Okay, next question. This is in reference to amendments, let's move to that one. Amendments are now taking approximately four months to process. Is there some priority being made for 1040Xs in disaster; for disaster losses? As much as I hate to say this, the answer to that question is no. All amended returns are worked on a first in, first out basis. And if I recall correctly, and my memory is a little bit shaky, I think that we had about a half a million 1040Xs that are in the hopper waiting to be processed. The thing you have to remember about filing a 1040X, even if you file it electronically, it still has to be reviewed by a real live IRS human being and that's what slows down the processing of 1040X returns, because we have to make sure that it's not a return that we might consider disallowing the claim. And so that's kind of what slows down the process of processing those 1040X returns. So unfortunately, your claim is going to have to wait. They say patience is a virtue. Your client is going to have to become very virtuous. Sorry about that. Yeah. All right. Great stuff, Joe. Okay, so I'm going to combine these two questions, because they; yeah, I'm going to combine these two. So it's in reference to transcripts. Again, one is asking whether or not they can obtain free transcripts using IRS, the online account for IRS, and whether or not there are fees to receive copies of tax returns. And they were like, where did the fees come from? When did that start? So when it comes to getting copies of transcripts and the transcripts and the returns. Okay, great. Yeah, that's a great question. Now, when we talk about $50 fees that is when you're asking for a real copy of a paper return. Now, generally speaking, I think that the e-file rate is about 90; somewhere in the 90 percentile, so there's very few paper returns that are actually being filed. So, to get a tax return transcript, as long as it's e-filed, it's pretty much going to show every line item that you have on the transcript, so there's no need to ask for a copy, a paper copy of a tax return. And only if, let's say, your client filed a paper copy of a tax return and they don't have a copy of their tax return and you don't have a copy of the tax return and they need specific line items off that return in order to file, like I say, a casualty loss or something like that, then they would generally have to pay a $50 fee in order to get a copy of a real paper filed tax return. So, if that is the case, and those cases are very limited now, they would have to pay the $50 and in those cases, the IRS will waive those fees and they will expedite the processing of a real copy of a real paper filed tax return. However, generally speaking, if you need a transcript of a tax return, the tax return is e-file, which is pretty much going to give you every line item that was on the return, then you can; your client can either go on to create an IRS online account and download the transcripts themselves. You as a tax professional, if you get a 2840 or 8821 for your client and file those with CAF, you can download those transcripts using the transcript delivery system, or if they're more than three years old, you can also file a Form 4506-T and get those transcripts going back, I believe, seven years. Yeah, I think it's up to ten years, Joe. I was just looking that up because I know we're talking about that it's up to ten years. All right. Okay. So let's move to the next question. This is awesome, Joe, thank you so much. We appreciate you. This person is asking if a taxpayer suffered flood damages to her personal residence in a federally declared disaster area in 2023, she spent $150,000 to repair the damage with no insurance or FEMA reimbursement. If the fair market value of the residence was higher after the repairs, will there be a casualty loss that she may claim? Okay, I'm going to have to guess at this answer or at least fill in a couple of gaps because they were not specifically mentioned. She said that no insurance or FEMA reimbursement was offered. However, if the property was covered by insurance and she did not make a claim or the claim is not going to be paid to a future year, that would change the dynamic of claiming or the amount of the calculated casualty loss. But let's say there was no insurance on the property and then they spent $150,000 to repair the damage, they would still be able to claim a casualty loss, but only up to the difference of the lesser of the adjusted basis of the property, and what's the other one, the decrease in the fair market value; the lesser of those two. That's the calculation they would go through. So again, I would look at publication 547, it kind of gives that exact example of how to compute a casualty loss that we covered during the presentation, and that's a great way of doing that. The other thing, that if, if the repairs increase the value of the property, there's a possibility that there is a casualty gain. However, in most circumstances, a casualty gain is usually postponed until the ultimate disposal of that property. But again, I would refer you to Publication 547 and review that information very closely. Excellent. Okay. Very good. Very good. All right. There's another question here. You've already responded to this one about the $50 fee for the transcripts or for the tax returns, paper returns, that is. Let's move to this next question. What do you advise taxpayers do to be prepared before a disaster strikes? I think that's a great question. Okay. Yeah. You know, the best thing you can do, let's say some of these people that are encountering hurricanes down in Florida and Texas, what have you, if before a hurricane actually arrives or sometime at your leisure, it doesn't have to be, you know, right as the hurricane is upon you, you know, to do a video of the inside and outside of your property, your house or apartment, and then if you're actually hit by this flooding or hurricane or tornado or whatever, go out and do a video of what went on afterward. That is one of the best ways of documenting the disaster and the types of losses, because what we found is that in many instances, you can document the after, but you can't really document the before. And you go through your house and I got to admit that if somebody said name absolutely every last little thing you had in your house that you would be using to claim the casualty loss, I would be hard pressed, like, okay, how many beds do we have, how many TVs do we have, how many rugs do we have, how many clocks do we have, all of these things you're not going to remember, but if you take a video or take pictures of before, go around each room in your house, then you're really like, oh, yes, I remember we had this, this, this, and you'll be able to document that, not only claiming a casualty loss, but more importantly, to your insurance provider. Yeah, okay. That is awesome. Okay, audience, that is all the time we have for questions, believe it or not. I want to thank Jeff Latessa and Joe McCarthy for answering so many of your questions and for offering their expertise and sharing their knowledge with us. Joe, I know you just finished talking, but I think you have some key points you want to share from today's webinar. Absolutely. Thank you, Evette. These are my key points. When a federal disaster is declared and FEMA provides individual assistance or individual and public assistance, the IRS will generally postpone filing and payment due dates for certain specific tax forms and certain specific tax payments. These postponed filing and payment due dates are listed in an IRS disaster release, which can be found on the IRS website. In addition, a casualty loss is computed by taking the lesser of a decrease in the fair market value as a result of the casualty and the adjusted basis before the casualty. And once you have the lesser of those two numbers, you would subtract any insurance or other reimbursements you receive from the smaller of one of the two above. And then finally, to claim a casualty loss, the loss must be attributable to a federally declared disaster. Taxpayers must first reduce each casualty or theft loss by $100, and taxpayers must then reduce their total casualty losses attributable to a federal federally declare disaster by 10% of their AGI and taxpayers must itemize their deductions. That is all the key points I have, so I will pass it back to you. Thank you so much. Thank you. Thank you. Thank you, Joe. Joseph McCarthy, Senior Stakeholder Liaison; Jeffrey Latessa, Stakeholder Liaison, thank you so very much. Okay, audience, we are planning additional webinars throughout the year. To register for an upcoming webinar, please visit IRS.gov, do a keyword search for webinars and select webinars for tax practitioners or webinars for small businesses. When appropriate, we will offer certificates and CE credits for upcoming webinars. We invite you to visit the IRS YouTube page at www.youyube.com/irsvideos. There you can view available recorded versions of our webinars and other key video messaging. Once posted. Again, continuing education credits or certificates of completion are not offered if you view an archived version of any of our webinars. Another big thank you to our presenters, Joe and Jeff, for a great webinar and for sharing their expertise. I want to also thank you, our attendees, for your wonderful question hanging in there with us for today's webinar Dealing with Disasters from an Individual Tax Perspective. If you attended today's webinar for at least 100 minutes after the official start time and you answered at least four polling questions during the live broadcast, you will receive a certificate of completion for two IRS CE credits. Again, the time we spent chatting before the webinar started does not count towards the 100 minutes and the polling question example, say it with me, does not count towards the four minimum questions response requirement. Audience, it's important for you to know that the certificates of completion will be emailed to the registration email address of qualifying participants as a PDF attachment. The email will come from the email address seen on this slide, which is cl.sl.web.conference.team@irs.gov. Please add this email address to your contacts to ensure you receive the email with the certificate attached. If you qualify for IRS Continuing Education Credit for this webinar and registered with your valid first name, last name and PTIN as it appears in your IRS PTIN account, your CE credit will be posted in your IRS PTIN account. If you are eligible for continuing education from the California Tax Education Council, your credit will be posted in your CTEC account as well. If you qualify and have not received your certificate and/or credit by October 18, please email us at cl.sl.web.conference.team@irs.gov. The email address is also shown on this slide. Remember we were talking about your local Stakeholder Liaison? Yep, if you want to find out who that person is, you may send us an email using the address shown on this slide and we will send you that information. We would appreciate it if you would just take a few minutes to complete a short evaluation before you exit. If you'd like to have more sessions like this one, let us know. If you have thoughts on how we can make them better, please let us know that as well. If you have any questions or requests for future webinars topics or pertinent information you'd like to see in an IRS Fact Sheet, Tax Tip, or FAQ on IRS.gov, then please include your suggestions in the comments section of the survey. Click the survey button on the right side of your screen to begin. If it doesn't come up, check to make sure you disabled your pop-up blocker. It has been a pleasure to be here with you and on behalf of the Internal Revenue service and our presenters, we would like to thank you for attending today's webinar. It's important for the IRS to stay connected with the tax professional community, individual taxpayers industry associations, along with federal, state and local government organizations, you make our jobs a lot easier by sharing the information that allows for proper tax reporting. Thanks again for your time and attendance. We hope you found the information helpful. You may exit the webinar at this time.
