SKR+Co Alert: Innovative vehicle credit, summertime tax tips, and treating losses from wildfires
How to treat losses from Colorado Wildfires
By Trinity Bradley-Anderson, Senior Tax Manager
If you are a survivor of the High Park, Waldo Canyon, Black Forest or Royal Gorge Wildfire, you may be wondering how your losses are treated for tax purposes: whether they are deductible, how much, and what is the process.
A Major Disaster Declaration was issued for both the Black Forest and Royal Gorge Wildfires by the President on July 26 of this year. (High Park and Waldo Canyon Fires were declared on June 28, 2012.) With this declaration come some benefits as far as how losses are treated. According to the IRS, "If you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to treat the loss as having occurred in the year immediately preceding the tax year in which the disaster happened, and you can deduct the loss on your return or amended return for that preceding tax year."
We have put together Frequently Asked Tax Questions on the Impact of Colorado Wildfires to assist you. Click here to read and download a copy.
The IRS provides helpful information regarding casualty losses due to disaster on their website, as well: Casualty, Disaster, and Theft Losses – Including Federally Declared Disaster Areas
We realize that you may need help sifting through the information, so please contact us if you have questions or need assistance.
Disaster Declarations and their related numbers:
Colorado Black Forest Wildfire (DR-4134)
Colorado Royal Gorge Wildfire (DR-4133)
Colorado High Park and Waldo Canyon Wildfires (DR-4067)