Tuesday, May 1, 2018




The 2017 federal tax law reforms include several cases where the normal reduction of a Form 4684 Casualty loss receives a special benefit.


Usually when computing a casualty loss, there are two limitations. The first is for each casualty loss claimed in a year there is a $100 reduction. In addition, total losses are reduced by 10% of Adjusted Gross Income. That last one can be quite a haircut.


With all the huge losses that occurred in 2017, Congress granted several waivers. One affected the three hurricanes, Harvey, Irma and Maria. Then in the major TAX law passed at the end of the year, all federal disasters in the last three months were included in the waiver.


For affected disasters the $100 limitation was actually increased to $500; while the 10% Adjusted Gross Income reduction was completely waived.


Sounds great and it is.


But there is more…


States do not necessarily follow.

My primary practice area is in California.

Back in 2008-2009 Congress granted a similar waiver.


AS in 2008-2009, for the 2017 disasters, California does not conform to the federal legislation.


So, while you get the waiver on your federal return, the California Form 4684 will still be based on the $100 and 10% Adjusted Gross Income reductions.




JOHN TRAPANI, CPA 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.  

© 2018, John Trapani, CPA,

All rights to reproduce or quoting any part of the entry in any other publication is reserved by the author. Republication rights limited by the author regarding this material.


Certified Public Accountant
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Thousand Oaks, CA 91362
(805) 497-4411
Putting The Pieces Together For You!


The contents in this blog entry represent only the understanding of the author.
Any accounting, business or tax advice contained in this entry is of a general nature and does not have any legal weight, it should not be considered an authoritative analysis of a specific issue no matter how much it seems to be “on point.” Nor should it be a substitute for a formal analysis of a specific fact situation. It cannot be considered sufficient to avoid tax-related penalties that might be assessed by a tax authority.
If desired, John Trapani, CPA  would be pleased to perform complete research and analysis of a taxpayer’s situation.

This material was completed on the date of the posting










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