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NEW YORK, April 1, 2003 - With two weeks left until tax day, last minute filers are sifting through their files to record last year's gains and losses. An often overlooked deduction is unreimbursed property losses, according to the Insurance Information Institute (I.I.I.).
"If your home, car, boat or other expensive property was damaged by a fire, flood, vandalism or other sudden and unexpected disaster, you may be able to take the loss off your taxes," says Jeanne M. Salvatore I.I.I.'s Vice President of Consumer Affairs.
To qualify for the deduction, these losses usually need to be substantial. If you were underinsured or had a large catastrophe deductible, you may have a sizable unreimbursed property loss. These losses can be caused by either natural disasters or man-made catastrophes such as vandalism, burglary, robbery or kidnapping for ransom.
"Generally, you can take the excess of over 10 percent of your adjusted gross income for unreimbursed property losses less one hundred dollars," says Anthony Orlando, CPA and member of the American Institute of Public Accounting (AIPA).
If you think you might qualify for this deduction, collect all receipts, insurance statements, police report (if appropriate) and other documentation and present it to your tax preparer to see if you qualify, says Salvatore. Those who prepare their own taxes, should review the "Nonbusiness Casualty and Theft Losses" on the IRS website http://www.irs.gov and contact their state income tax bureau to learn more about both the federal and state guidelines for this deduction. Insurance information is available at http://www.iii.org.
The Insurance Information Institute is a non-profit, communications organization sponsored by the property/casualty insurance business.