Texas Disaster Casualty Loss Deduction

As we slowly roll into the Texas winter months, it's hard to forget this year's winter storm. The harsh winter weather this February resulted in 58 deaths nationwide, 69% lost electricity, and a cost of over $295 billion dollars in damage. In response to the Texas Winter Storm, President Biden declared parts of Texas impacted by the storms a federal disaster. What is a federal disaster declaration and what does that mean to taxpayers?

Disaster Casualty loss. A disaster loss is a loss that is attributable to a federally declared disaster and that occurs in an area eligible for assistance pursuant to the Presidential declaration, according to the IRS. It's important to know, there are two other types of casualty losses Federal causality losses and qualified disaster losses. Qualified disaster loss. A qualified disaster loss also includes an individual's casualty and theft loss of personal-use property that is attributable to A major disaster declared by the President under section 401 of the Stafford Act in 2016.

Casualty losses can result from a number of different causes, including the following.

•Car accidents (but see Nondeductible losses, next, for exceptions).

•Earthquakes.

•Fires (but see Nondeductible losses, next, for exceptions).

•Floods.

•Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster.

•Mine cave-ins.

•Shipwrecks.

•Sonic booms.

•Storms, including hurricanes and tornadoes.

•Terrorist attacks.

•Vandalism.

•Volcanic eruptions

For Texas residents impacted by 2021 Winter Storms, you may be able to claim deductions for any losses sustained for personal and business property due to the storm. If you have any questions or concerns on how to claim your deductions, please contact us at 512-354-7878.