Was it a Casualty Loss or an Involuntary Conversion Gain
The income tax consequences of a
casualty event seem to be simple on their face. After all, most of these events
are covered in the Internal Revenue Code in two sections and for personal
losses, only portions of those Code sections.
My experience over the past
decade convinces me that they are not that simple. Why, I have corrected the
reporting a number of returns in the past decade. Sometimes the need to correct
a return involves the taxpayer paying additional taxes. Most of the time
taxpayers actually get refunds. In the cases where taxpayers have to pay
additional taxes due to the correction of a previously filed return it always
looks like the tax preparer did not understand the situation, the tax preparer
did not take the necessary time prepare a correct return. Or the tax preparer
wanted to secure a refund for the taxpayer, even though there was a high
likelihood that that refund would have to be repaid in a future year. A lot of
information is provided on this blog, but a competent tax preparation
professional will save a taxpayer more than the fee that is paid for the
services. That may sound self-serving, as I am a tax preparer. It is
self-serving, and it is also true.
As an example see “Don’t Rush to
Deduct” elsewhere in this blog.
All rights to reproduce or quote
any part of the chapter in any other publication are reserved by the author.
Republication rights limited by the publisher of the book in which this chapter
appears also apply.
JOHN
TRAPANI
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Certified
Public Accountant
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2975
E. Hillcrest Drive #403
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Thousand
Oaks, CA 91362
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(805)
497-4411 E-mail John@TrapaniCPA.com
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Website: www.TrapaniCPA.com
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Blog:
www.AccountantForDisasteRrecovery.com
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It All Adds Up For You
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This material was contributed by John
Trapani. A Certified Public Accountant who has assisted taxpayers since 1976,
in analyzing and reporting transactions of the type covered in this material.
Internal Revenue Service Circular 230 Disclosure
This
is a general discussion of tax law. The application of the law to specific
facts may involve aspects that are not identical to the situations presented in
this material. Relying on this material does not qualify as tax advice for
purpose of mounting a defense of a tax position with the taxing authorities
The
analysis of the tax consequences of any event is based on tax laws in effect at
the time of the event.
This
material was completed on the date of the posting
© 2012, John Trapani, CPA,
