Disasters and Taxes: Tax Treatment of Casualty Losses

Author: Steven G. Siegel

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

News-making disasters affect your clients’ tax returns. Relief is available to taxpayers who’ve suffered these losses, but achieving that relief requires understanding and applying the applicable rules. There are also significant developments with the IRS in the area of casualty losses and getting those losses properly reflected on Form 4684. Taxpayers who have suffered losses in declared disaster areas may have opportunities to generate immediate cash savings as well as reduce current tax liabilities. This requires fully understanding the definitions of and rules surrounding casualty losses and properly applying them. These rules are complex and documentation is difficult, especially when many clients have lost all their records.

Join highly regarded tax practitioner and educator, Steve Siegel, J.D., LL.M., for a practical and up-to-date review of the tax treatment of disaster and casualty losses. You won't want to miss this course with Mr. Siegel, an outstanding speaker and presenter, as he walks you through the critical rules, definitions and reporting requirements of casualty losses. This program will also include tips on filing Form 4684 and properly reflecting the losses on both personal and business returns.

Publication Date: September 2020

Designed For
Tax partners, managers, and staff, CPAs, enrolled agents, tax return preparers, tax attorneys, and other practitioners who prepare income tax returns and advise clients on tax matters.

Topics Covered

  • 2020 — An Unprecedented Year of Disasters
  • The Basic Rules
  • What Is a Casualty Event?
  • 2017 Tax Cuts and Jobs Act Changes in the Law
  • The Taxpayer Certainty and Disaster Relief Act of 2019
  • The Pandemic — A Presidentially‐Declared Disaster
  • IRS and FEMA Relief
  • Reconstruction of Records
  • Special Rules in 2020: The CARES ACT
  • Return to the General Rules Describing Casualty Losses
  • When Should a Casualty Loss Deduction be Claimed?
  • Substantiation of Casualty Loss Claims
  • How to Determine the Amount of a Casualty Loss to be Deducted—or Gain to be Taxed
  • Reduction of Casualties of Personal: Use Property for the Two Required 'Floors'
  • Deductibility of Casualty Losses
  • Special Rules for Disaster Losses
  • Reporting of Casualty and Theft Losses: Generally
  • Reporting Casualty and Theft Losses on Form 4684
  • Special Rule for Qualified Disasters Occurring Before 1/20/20
  • How to Defer the Recognition of Casualty Gains
  • Theft Losses

Learning Objectives

  • Describe the tax treatment of disaster and casualty losses
  • Recognize the potential issues facing clients
  • Identify specific events — Casualty or Not? and apply the reporting and substantiation requirements
  • Differentiate between what is or isn't a qualifying casualty loss events
  • Describe an event that is swift and precipitous, not gradual or progressive
  • Identify correct statements regarding special rules in 2020 related to early distributions and the CARES Act
  • Identify the steps in reporting casualty and theft losses on Form 4684

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $59.00

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