Tax Relief for Flood Victims

Victims of Tennessee’s recent floods may qualify for some indirect help from an unlikely ally, the Internal Revenue Service. It appears that because parts of Tennessee have been declared a federal disaster area, the IRS will let people who suffered a casualty loss take a deduction for the loss off their federal income tax. Also, the deduction can be taken off the 2009 tax return (and if you have already filed for 2009, you can file an Amended Return). There are wrinkles to this, so it is important to check with a tax professional. Note that there may also be additional residential energy credits if you replace windows and certain heating and cooling units. Finally, in Davidson County, the Davidson County Assessor of Property is developing a plan to assist owners of property “substantially damaged” or rendered unfit for occupancy. This plan would allow for a pro-rata adjustment of their 2010 property taxes.