Monday, October 6, 2014

DISASTER RECOVERY Income Tax Reporting and Income Tax Benefits Professional Seminar

DISASTER RECOVERY Income Tax Reporting and Income Tax Benefits  Professional Seminar

DISASTER RECOVERY Income Tax Reporting and Income Tax Benefits 

After speaking to over 400 taxpayers in three different Colorado counties earlier this year, in February, I attempted to assist taxpayers further by contacting the Colorado CPA Society to offer an 8 hour CPE course to the Colorado CPA community.

That did not work out.

But recently, the Director of Education, Hayden Williams, CPA, at the Washington State CPA Society determined that a class was certainly needed to his constituent CPAs.

The Class: 
DISASTER RECOVERY Income Tax Reporting and Income Tax Benefits 

November 12, 2014, Event start time: 8:00AM 
The seminar is offered both on-line and at the Society’s Learning Center in Bellevue, Washington. 

Below is the description from the Washington CPA Society website.

The course level is listed as basis as it assumes no prior knowledge of casualty or involuntary conversion tax law. However, the material goes into detail and explores the depths of the ways clients can “innocently” make major errors when the unique concepts of this area of the tax law are applied incorrectly or without understanding the consequences of each decision. 

Don’t forget, these events involve assets of major value and investment for all taxpayers involved in these tragic events.

CPE Credits: Tech/Taxes 8.00
Course Type: Seminar Instructor: Trapani John
Course Level: Basic (See above explanation of “Basis”)
Fees: Member - $305.00 NonMember - $385.00
Objectives: The objective of this material is to provide tax professionals with in-depth information on how to avoid the pitfalls in advance of delivering a tax return to a client where the taxpayer has experienced a catastrophic physical loss. 
Major Subjects: This course will prepare the CPA for the gamut of issues that arise in a disaster as well as individual losses and condemnations.

•Critical filing dates
•Is there a Loss or a Gain?
•Tax Year to Claim Loss?
•Sell & Buy or Rebuild?
•Replacement Rules?
•Reinvestment periods
•Realization vs. Recognition
•Qualified replacement property
•Deductions, restrictions and limitations
•Insurance basics and 
•More ...

The course materials include four PDF books and additional supporting materials:
Course outline for hands-on use during the course presentation
Summary discussion of the major topics, suitable to provide to clients (it is not packed with law, case and ruling citations)
A nearly 500 page technical text that includes all the law, case and ruling citations
Finally, a guide for appraisers 
The appraisers’ guide provides a communication device between CPAs and appraisers. The 75 page book does not deal with appraisal methods or practices that are the purview of a skilled and knowledgeable appraiser, but provides information the appraiser community needs of the issues that they should address in a casualty loss appraisal in order that the money being spent for their report is not wasted. 

The books will be provided to participants by the Washington CPA Society in PDF form on a thumb drive. The value of the books, by themselves exceeds $100.00. The PDFs are fully searchable and if you so desire and be printed or shared with other colleagues. The main technical text includes a detail table of contents of nearly 20 pages that makes access to specific topics and technical materials very easy.

I invite you to join us online for the class on November 12th. If you have any questions, please contact me directly.

Please check-out the course by linking to it using the URL below or going to the Washington CPA Society website and searching the Education section for the class “DISASTER RECOVERY Income Tax Reporting and Income Tax Benefits (15PRTRNV)” title or my name.

I have sent this notice to only 30 CPAs in Colorado whose name have come to my attention or who I have had contact with. If you believe the course would be useful to other CPAs, please let your Colleagues know about the offering.

When I was speaking to taxpayers in February, the Colorado Sprints presentation was recorded and is available on their YouTube channel at “
Or, search for “Post Disaster Income Tax Issues.”

The meeting was sponsored and presented by: “ElPasoCountyCO” as part of United Policyholders, Inc. “Roadmap to Recovery” program.

The video is also accessible on the United Policyholders website “”
The YouTube file has been viewed over 400 times.

Thank you for reading this email, I hope that you will join us on November 12th.

Monday, September 22, 2014



On September 11, 2014, the President declared the August 24, 2014, Napa Valley Earthquake a federal disaster (FEMA number DR 4193). The declaration did not include any financial assistance, at this time, being made available to individuals or businesses. However, the mere declaration of the incident as a Federal Disaster opens up the federal Income Tax Code provisions applicable to disasters to individuals and busineees.

Internal Revenue Code section 165(h)(3) “SPECIAL RULE FOR LOSSES IN FEDERALLY DECLARED DISASTERSstate in subparagraphs (C)(i) and (C)(ii), the definitions or a “FEDERALLY DECLARED DISASTER for purposes of the availability of the special sections of the Internal Revenue Code  to taxpayers who experience a  major disaster and defines a “DISASTER AREAfor purposes of applying the special benefits of the Tax Code applicable to declared federal disasters:

165(h)(3)(C)(i) FEDERALLY DECLARED DISASTER.— The term "federally declared disaster" means any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
165(h)(3)(C)(ii) DISASTER AREA.— The term "disaster area" means the area so determined to warrant such assistance.

Once the President makes the “Declaration” the Internal Revenue Code’s special sections become available to taxpayers.


One of the considerations that taxpayers who have not yet filed their 2013 income tax returns should consider before the October 15th extension due date is the possibility of claiming a loss on their 2013 tax return as permitted in these circumstances. Taxpayer who file their returns on an annual basis have until April 15, 2015 to make a final decision regarding claiming the loss on their 2013 tax return, but they may want to claim the benefits now.

Claiming a disaster (casualty) loss deduction is not a decision that should not be taken lightly. Claiming a disaster (casualty) loss tax deduction should be claimed only once all the facts are tied down.

There are a number of entries on this blog that should be consulted to understand the process and implications of claiming a deduction. A knowledgeable tax professional should be contacted to discuss the details of your circumstances. Many facts will be important to understand before a decision can be made.

JOHN TRAPANI assists both taxpayers directly and advises taxpayers’ tax professionals.
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.

© 2014, John Trapani, CPA,
All rights to reproduce or quote any part of the chapter in any other publication are reserved by the author.


Certified Public Accountant

2975 E. Hillcrest Drive, #403

Thousand Oaks, CA 91362

(805) 497-4411       E-mail


It All Adds Up For You

Tax Advice Disclaimer
Any implication of accounting, business or tax advice contained in this material is not intended as a thorough, in-depth analysis related to your specific issues. It is not a substitute for a formal opinion including a discussion or your specific situation. It is not sufficient to avoid tax-related penalties. If desired, John Trapani, CPA would be pleased to perform the requisite research, specific to your facts and circumstances and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.
This material was completed on the date of the posting

 Below is the FEMA Disaster Declaration:

President Declares Disaster for California
Release date: September 11, 2014
Release Number: HQ-14-075
WASHINGTON, D.C. – The U.S. Department of Homeland Security's Federal Emergency Management Agency announced that federal disaster aid has been made available to the State of California to supplement state, tribal, and local recovery efforts in the area affected by an earthquake during the period of August 24 to September 7, 2014.
The President's action makes federal funding available to state and eligible tribal and local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by the earthquake in Napa and Solano counties.
Federal funding is also available on a cost-sharing basis for hazard mitigation measures for all counties and tribes within the state.
Stephen M. De Blasio Sr. has been named as the Federal Coordinating Officer for federal recovery operations in the affected area. De Blasio said additional designations may be made at a later date if requested by the state and warranted by the results of further damage assessments.
Follow FEMA online at,,, and  Also, follow Administrator Craig Fugate's activities at
The social media links provided are for reference only. FEMA does not endorse any non-government websites, companies or applications. 
FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.
Last Updated: 
September 12, 2014 - 07:29

Thursday, May 15, 2014



As we observe the early start of fire season in California, we note the need for taxpayers to go into “Recovery Mode” immediately, even as you are evacuating. Here are some tips from this blog and from the United Policyholders website.

As you evacuate here is a list of documents you should protect:

Financial documents to consider securing and recording in digital form:
ü  Cost records for real property (escrow statements) and major items of contents, including jewelry, cameras, electronics and art works.
Record the cost of significant assets in every room of your home and office in a ledger or journal.
ü  Wills, and living trust documents, grant deeds and property escrow settlement statements.
ü Power of attorney, living will (health directive) / medical powers.
ü  List of emergency contacts, including doctors, financial advisers, and family members.
ü Birth, death, and marriage certificates.
ü Copies of drivers’ licenses.
ü Copies of important medical information, including your health insurance card, doctor’s name and phone number, immunization records, and prescriptions (including prescriptions for glasses and contacts).
ü List of insurance policies (life, health, disability, long-­term care, auto, homeowners, renters), including the type, company, policy number, and name of insured, agent contact information, claims contact information.
ü Copies of insurance policies including declaration pages.
ü Adoption papers.
ü  Passports.
ü Social Security cards.
ü Divorce and child custody papers.
ü Military records.
ü  Mortgage/property deeds.
ü Stock and bond certificate-s.
ü Retirement account records.
ü  Recent checking, savings, and investment account statements.
ü Vehicle and boat title documents.
ü  Inventory of your possessions.
ü Warranties and receipts for major purchases Credit card records.
ü Recent pay stubs and employee benefits information.
ü  Rental agreement/lease and/or mortgage documents.
ü  Safe deposit box information (location, contents, and key number).
ü  Store negatives of photographs, protected in plastic sleeves, separate from the prints.
ü  Income tax (federal and state) returns for past seven years, plus any older returns that may include important continuing information.

After you evacuate there are tasks to start working on.

Here is a checklist from “AFTER A CATASTROPHIC EVENT OR DISASTER” the Tab at the top of this blog. Follow these steps to make your family safe and start your recovery:

Call emergency services as needed. However, lines will be overloaded and wait times may be excessive for assistance needed.

Important steps to take immediately. This list provides a head start before you discuss your situation with a tax professional.
First, Check on the health and safety of any persons or pets,

Second, Secure the impacted area;

If you are not home or at your office, attempt to contact family and business associates to verify their physical health and safety

Locate and test emergency camera.

Take measures to protect the physical security of any intact assets, If safe to do so:

Turn off Gas – IF SAFE TO TURN OFF

Turn off Water – IF SAFE TO TURN OFF

Turn off electricity – IF SAFE TO TURN OFF

Photograph as much damaged and undamaged areas as is safe to do.

Take notes and journal all conversations.

Use tarps to cover exposed areas

Remove valuable assets from vulnerable areas, if safe to do so.

Then: Mitigation - Stop or reduce continuing damage.

Call family and friends in immediate area to check on their well-being and communicate your own status. Lines may be overloaded or down.

Call out-of-area friends and family to report status and set up line of communication. You may have to wait for them to contact you.

Locate emergency supplies. Evaluate the condition and quantities of thee items. Remove them to a safe place if necessary.

Retrieve important documents

Contact out-of-area people entrusted with documentation back-ups. Verify condition and date of back-ups.

Start and maintain a record of all your financial transactions.

Because of insurance claim and tax benefits that may turn out to be available, you should keep records of all extra costs that you incur as a result of the disaster to keep your family safe and secure or your business back to an operational state. These will fall into three categories:

Include debris removal, clean-up costs and any expenses that you may incur for experts who assist you in the process of establishing your loss for tax and insurance purposes. Depending on the terms of any insurance, some or all of these costs may be reimbursed.

Record all expenditures related to replacing any items lost, whether they are personal property (contents) or structure related costs.

Validate credentials and reference check experts

Make detail notes in your journal of all conversations. Identify the time point of all conversations and events. The time sequence may later be important information.

Especially for events that occur late in the year, contact your tax professional to determine the time-frames that sensitive tax reporting may be required. Additionally, certain non-income tax deadlines may be extended due to the event.

Preserve All Evidence of the event. Photograph evidence before and during clean-up. Physical evidence can be moved if a hazard, but not destroyed.

Yes you will have many tasks to complete after the fire is out and you can return to your homes and businesses. To maximize your positive outcome from a tax perspective, there are tasks you need to complete. See:

This is an entry on this blog at (March 3, 2014 post date):

You can also see another version of this list at the United Policyholders website:
Tax Tips for Disaster Survivors

And as you address your rights under you insurance coverage, check out these posts on the United Policyholders website:
Questions To Ask Before Hiring A Public Adjuster


If you have questions to ask this blogger,
Call: (805) 497-4411,  or Write: E-mail

JOHN TRAPANI assists both taxpayers directly and advises taxpayers’ tax professionals.
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.  

© 2014, John Trapani, CPA,
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.


Certified Public Accountant

2975 E. Hillcrest Drive, #403

Thousand Oaks, CA 91362

(805) 497-4411       E-mail


It All Adds Up For You

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