Tax Relief May Be Available For Alabama Disaster Victims
Release Date: October 16, 2004
Release Number: 1549-056
» More Information on Alabama Hurricane Ivan
MOBILE, Ala. -- Alabama residents affected by Hurricane Ivan may be eligible for various forms of tax relief that could lessen some losses, federal and state disaster recovery officials said today.
"The U.S. Internal Revenue Service (IRS) permits those with casualty losses suffered as a result of the disaster to claim those losses immediately by amending their 2003 tax return. It can be one of the fastest sources for obtaining cash after experiencing disaster-related losses, " said Federal Coordinating Officer Michael Hall.
Casualty losses for tax purposes are based on the decrease in fair market value of the property as a result of the disaster, minus any insurance payments or other reimbursements received. The IRS will ask for your latest tax return, estimates of repairs, before and after photographs, appraisals or any other loss documentation.
Figuring the deductible loss is the same for personal-use property. Renters qualify to choose relief under these rules if the rented residence is their main home.
Taxpayers should consider this option carefully because it may be more advantageous to wait to claim their losses on 2004 returns due next April.
Casualty losses can be claimed on IRS form 4684. IRS publications 547 and 2194 are also available to provide guidelines. Both the form and publications are found on the IRS Web site at www.IRS.gov or by calling toll free 800-829-1040.
Disaster tax reduction may be available to taxpayers living in any of the 65 disaster-declared counties who sustained losses as a direct result of Hurricane Ivan. Persons suffering disaster damage but living in a non-declared county may only claim disaster losses on their 2004 return.
"We want all eligible victims to receive the maximum number of benefits available. Tax reduction could be a significant benefit," said State Coordinating Officer Bruce Baughman.
Baughman also advises property owners affected by the disaster to visit their county revenue commissioner's office where they can sign an assessment sheet declaring the specifics of the reduction in value of their property. This must be done by December 31, 2004 for the 2005 tax year.
The U.S. Small Business Administration (SBA) is on site as the federal government's primary source of money for the long-term rebuilding of disaster-damaged private property. SBA helps homeowners, renters, businesses of all sizes, and private non-profit organizations fund repairs or rebuilding efforts, and cover the cost of replacing lost or disaster-damaged personal property. SBA disaster loans pay for losses not fully compensated by insurance or other recovery assistance.
On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA's continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program and the U.S. Fire Administration.
Last Modified: Monday, 18-Oct-2004 11:04:41