Tax Matters for Disaster Losses
Author: Jane Ryder
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
There are three levels for deducting losses from federally declared disasters, we will discuss how to identify each case and evaluate what each taxpayer is eligible for. Specific tax benefits available to all taxpayers related to any federally declared disasters, may include adding the casualty loss to the standard deduction or choosing to claim the casualty loss in the prior tax year. We will also review the provisions of the new bill H.R. 5863, signed into law on Dec. 12, 2024, which extends the rules for the treatment of certain disaster-related personal casualty losses and provides tax relief for losses due to a federally declared disaster as a result of any forest or range wildfire. It also details exclusion from income payments related to these disasters and extends the statute for claiming refunds related to disasters specified in the bill to one year from date of enactment.
Publication Date: June 2025
Topics Covered
- Extension of Rules for Treatment of Certain Disaster Related Personal Casualty Losses
- New 2025 Federal Legislation Expected to Extend Disaster Loss Dates
- Exclusion from Gross Income for Compensation for Losses or Damages Resulting from Certain Wildfires
- Extenson of Period of Limitation
- Reporting Casualty Losses After TCJA
- Identifying Type of Disasters for the Purpose of Determining Eligible Tax Treatment
- FEMA Website - Finding Federal Disaster Declarations
- Filing Tax Return to Claim Disaster Loss Related to a Federally Declared Disaster
- Qualified Disaster Losses
- Current IRS Disaster Relief Announcements
Learning Objectives
- Identify which disasters qualify for relief under the new bill
- Identify the expanded statute of limitations for refunds
- Explain the specific tax relief benefits available under the bill and under other federal disaster regulations
- Determine the best timing and method to file for claiming the federal disaster loss deduction for each client
- Identify the three levels of tax benefits available for different federal disasters
- Identify the level of each federal declared disaster and how to confirm it
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
