Did You Have Substantial Property Damage In 2005? You May Be Able To Deduct A Portion Of Uninsured Losses From Your Taxes -- The I.I.I. Suggests You Document Unreimbursed Losses

NEW YORK, March 30, 2006-With tax day around the corner, taxpayers are sifting through their files to assess last year's gains and losses. An often-overlooked deduction is unreimbursed property and casualty 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 deduct a portion of the loss from your taxes," says Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. "And don't forget to include your insurance deductible."

To qualify for the deduction, the losses usually need to be substantial. If you were significantly underinsured or had a large catastrophe deductible you may have a sizable unreimbursed property loss. Losses can be caused by natural disasters or man-made ones such as vandalism, burglary, robbery or kidnapping for ransom.

"Generally, you can deduct the loss to the extent it exceeds 10 percent of your adjusted gross income, less one hundred dollars," says Jerry Love, CPA/PFS and president and chief executive office of Davis, Kinard & Co., P. C., a CPA firm based in Abilene, Texas and member of the American Institute of Certified Public Accountants' (AICPA) personal financial planning membership section.

"If the property is used in a trade or business, slightly different rules apply, so it is important to ask your tax preparer for assistance," Mr. Love notes.

If you think you might qualify for an unreimbursed loss deduction, collect all receipts, insurance statements, the police report (if appropriate) and other documentation and present it to your tax preparer to see if you qualify.

If you prepare your own tax return, the IRS has created a hurricane-victim resource center on its Web site located at http://www.irs.gov/newsroom/article/0,,id=147085,00.html; or call 1-866-562-5227. You can find additional information on un-reimbursed insurance losses at http://www.irs.gov/taxtopics/tc507.html.

The AICPA and the National Endowment for Financial Education (NEFE) have written and produced Disaster Recovery: A Guide to Financial Issues to help people affected by disaster minimize the financial impact of a disruptive event on their lives and well-being. The guide contains important tax information and is being distributed by participating local chapters of the American Red Cross across the United States. The guide can also be found at www.redcross.org.

For more information about insurance, go to the I.I.I.'s Web site: http://www.iii.org.

The I.I.I. is a nonprofit, communications organization supported by the property/casualty insurance industry.

The American Institute of Certified Public Accountants (www.aicpa.org) is the national, professional association of CPAs with approximately 350,000 members, including CPAs in business and industry, public practice, government, and education; student affiliates; and international associates. It sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state and local governments; and nonprofit organizations. It also develops and grades the Uniform CPA Examination.