How Do You Document a Disaster Loss?
Substantiation of a loss is critical at the time of the loss. Building the documentation for the cost basis, any deductible loss or establishing the limits of the gain on an involuntary conversion is an important
According to the National Taxpayer Advocate's Fiscal Year 1999 Annual Report to Congress one of the most litigated Issues for individuals and small businesses carried from the 1998 Annual Report to Congress involved THEFT/CASUALTY LOSSES (Internal Revenue Code Section 165) -- Primarily issues involving the facts of a specific loss and the taxpayer's ability to establish entitlement to a deductible loss.
Avoid the disagreements, you don’t want to be in tax court, document, document, document. In many cases this is information that will be lost if not recorded properly at the time of the event.
