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Week Two Largely Unchanged
Week two of April marked the second straight week of positive sales, although just barely. Independent retailers reported that their same store sales were up one tenth of one percent. Week two sales were almost equal to those of week one as well. It looks like sales have may evened out after an up and down few weeks due to Easter.
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| Same Store Sales
% Change from last year
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| Same Store Sales – Previous Months
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| BGBC Partners Tax Update: Deducting Casualty Losses
Unfortunately, natural disasters typically cause a lot of damage, physically, emotionally, and monetarily. After the storm has cleared, damage assessment begins, and a plan for recovery is needed. One question many may ask is: “how will we be able to recover from this?” Most of the time, this question may be referring to the financial means of individuals or businesses. Even though it won’t put you fully back to the position you were in prior to the event, the IRS does provide aid in your recovery, financially. Severe weather and other natural events causing property damage can lead to casualty losses. The IRS states that a casualty loss is a loss due to “damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption.”
If the loss property is covered by insurance, you may only deduct the casualty loss if a timely insurance claim is filed. Insurance money that is received must reduce the amount of loss that is deducted. Deductions for casualty losses are available for both individual and business taxpayers; however the calculation varies for each.
Individuals may claim a deduction for casualty losses only if they file Schedule A with Form 1040 to itemize their tax deductions. The amount of loss that is able to be claimed is determined with regard to either the adjusted basis or the fair market value (FMV) of the property. The casualty loss (after reduction for any insurance proceeds received) that may be claimed is the lesser of: - The adjusted basis of the property (the cost of the property including additions and improvements less any depreciation) immediately prior to the event, or
- The decline in the property’s value (its FMV immediately before the event less its FMV immediately after the event)
Also for individuals, the casualty loss is then reduced by $100 per loss event plus 10% of the individual’s adjusted gross income.
For corporations and partnerships, the deductible casualty loss calculation is simpler. The amount of loss the business is eligible to deduct is the lesser of: - The decrease in the FMV of the property as a result of the casualty event (if not completely destroyed), or
- The adjusted basis (net book value) of the property immediately before the event
Losses are generally deductible in the year that the casualty loss occurs. However, if the casualty loss occurs in an area declared to be a federal disaster area, taxpayers may be able to amend their prior year tax return, if already filed, to claim a current year casualty loss. This would allow the taxpayer to obtain tax funds more immediately rather than waiting until the current tax year’s return is filed the following year.
Even though casualty losses can be devastating, relief on the financial front may be available through your tax filings to help ease the burden and recovery of your losses. Make sure you consult your tax advisor in the event that you or your business has been affect by the unfortunate incident of a casualty loss.
BGBC Partners, LLP is a full service certified public accounting and business consulting practice.
For more information, contact Brad Bell, CPA or Steve Reed, CPA/ABV/CFF at BGBC Partners, LLP (317-633-4700).
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| For More Information,
Contact Mark Ehleben
877-435-9400 x1402
marke@fmssolutions.com
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