J.K. Lasser's 1001 Deductions and Tax Breaks 2015: Your Complete Guide to Everything Deductible

CHAPTER 13 Insurance and Catastrophes

1. Casualty and Theft Losses
2. Disaster Losses
3. Disaster Relief Payments
4. Damages
5. Disability Coverage
6. Accelerated Death Benefits
7. Legal Fees
8. Appraisal Fees
9. Damage from Corrosive Drywall

 

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2014 that had expired at the end of 2013. Check the online supplement in February 2015 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2014 returns.

No one likes to think about bad things happening, but happen they do, as seen in severe winter storms throughout parts of the country, spring floods in numerous states, tornados in the Midwest and South, and about 30% of the continental U.S. was in a moderate to severe drought as of June 2014. Natural disasters, accidents, illnesses, and now terrorist activities and war all present serious personal and financial threats that can become reality. When faced with such catastrophes, insurance may carry you just so far, with economic losses outstripping your insurance recoveries. But you may be able to mitigate your financial losses with certain tax write-offs.

This chapter explains the tax rules related to insurance and catastrophes. Mortgage insurance is covered in Chapter 4. Losses to your bank deposits are discussed in Chapter 8. For more information, see IRS Publication 547, Casualties, Disasters, and Thefts (Business and Nonbusiness); IRS Publication 584, Casualty, Disaster, and Theft ...