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Alert Financial Services - Louisiana P.O. Box 934 Lake Charles, Louisiana 70602 Telephone: (337) 529-2401 Facsimile: (866) 295-4327 Alert Financial Services - Florida (Corporate) 5711 Bowden Road Suite 15-252 Jacksonville, Florida 32216 Telephone: (904) 210-4319 Facsimile: (866) 295-4327
Email Inquiries: info@alertfinancial.com |
Thursday, June 14, 2007 Written By: Sherrie L. Shorten By now, just about everyone in the affected areas of Louisiana has heard about the IRS (Internal Revenue Service) "Safe Harbor Casualty Loss" procedures, and most are only concerned with the tax savings that might be realized by filing amended prior , previous or current year tax filings but like a whole lot of other things related and stemming from Hurricanes Katrina and Rita, sometimes what you hear may not necessarily be the whole story. In many instances, the cost to have your return(s) amended, current or previous years, may far outweigh the benefits realized by taking advantage of what this program has to offer. First
and foremost, the deductions DO NOT APPLY to motor homes,
boats, mobile homes, campers, condos and co-ops, and your home must meet
the criteria as defined by Internal Revenue Service, which states," The
safe harbor methods apply to personal-use residential real property and
certain personal belongings damaged or destroyed as a result of Hurricanes
Katrina, Rita or Wilma." Second, if you have owned your residence for over ten (10) years or inherited it from a family member it is quite possible that your losses will be limited regardless how they maybe calculated, meaning the Safe Harbor method calculates your losses at One hundred thousand dollars ($100,000.00) but the original cost of your home plus improvements only totals seventy-five thousand dollars ($75,000.00), the total maximum deduction that you may realize is the seventy-five thousand dollars and you can not deduct the additional twenty-five thousand dollars from current or prior year tax returns as calculated by IRS table regarding Safe Harbor Casualty Losses. Third and final, to avoid the possibility or consequence of imposed penalties, interest and the repayment of any monies found not to be qualified under this revenue procedure, be certain to discuss thoroughly with your tax professional, and in detail both the pro's and con's with regard to taking advantage of the IRS Safe Harbor program, it may not be totally beneficial regarding your long term planning strategy and objectives, but more importantly, make certain that should you decide to go forward with filing amended returns on your own, or without the advice of a competent and/or licensed tax professional, you should be certain to acquaint yourself thoroughly with the rules, definitions and guidelines of this revenue procedure (Rev. Proc. 2006-32).
This information is provided for informational purposes only and should not be interpreted, construed or understood as legal and/or professional advice, and you should always consult with either a competent and/or licensed tax professional or the Internal Revenue Service before proceeding. All materials are the property of Alert Financial Services and U.S. Expedited L.L.C. and protected by US copyright © 2000, 2001, 2002, 2003, 2004,2005, 2006, 2007. All rights reserved, Alert Financial Services © 2007
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