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Lose your house in a fire? New tax bill goes after your write-off
Several of the ten mobile home trailers that burned in the Thomas Fire in the Santa Paula area are seen early Wednesday, Dec. 6, 2017.
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Lose your house in a fire? New tax bill goes after your write-off
The new tax law pending in Congress would wipe out the rule that lets individuals deduct the value of uninsured property lost in some, but not all, wildfires. Under the new law, the severity of the disaster would dictate whether a write-off applies.
Right now, an individual who loses a home or property in a fire can write off all but about $100 of uninsured losses. The same rule applies to losses due to theft, flood, earthquakes, shipwreck or storms.
Under the new tax bill, that’s going to change.
Only those losses that occurred in a federally-declared disaster will be eligible for the tax write-off. (Here is FEMA's definition of a disaster.) Taxpayers who lose property that’s uninsured in smaller fires and other incidents will not get a tax break.
If passed, the new rule would apply to losses occurring in 2018 onward. So this year’s victims of all fires, big and small, can still get the tax write-off for their losses.
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