Hi Guys, I am one of the Florida people recovering from Hurricane Ian. We did not get slammed like so many, but lost our fence, palm trees, some car damage, and misc house damage. OK. So, by the time we meet our insurance deductible, we will have losses of maybe $8,000 - $10,000. Our retirement involves me selling some shares of stock at the end of every year. We use this amount to live off of for the next year. So, let’s say I sell some shares that have made me a profit of $10,000 and I have hurricane losses of $10,000 (in 2022 - the same tax year for both). Is that a wash? Or is that not that simple. (I am sure it is not that simple.) Thanks for any advice.
–Footsox
Some IRS help –
No. There are hurdles to jump through to be able to deduct your hurricane losses. Hohum pointed you in the right direction there.
If you are able to deduct your hurricane losses, they will be itemized deductions on schedule A, not capital losses that make their way to schedule D. They only offset in the way that your mortgage interest offsets your wages.
–Peter
PS - Welcome!!! Glad you made it here. Your feelings of extreme confusion on this site are normal. It’s completely different from the old site. Poke around, ask for help, and you’ll eventually be able to accomplish basic navigation. But remember that TMF traded bells and whistles for what was a very simple board layout. We now have bells and whistles, we just don’t know where they all are because these boards use a stream-of-consciousness kind of organization. There is organization, but it takes a back seat to constantly having random stuff thrown in your face.
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Thanks for the info. Our taxes are pretty simple, now that we are retired. Our income is $32,000 per year. We supplement that by selling shares of stocks we have held for years. Our deductions are just medical expenses. I just read the info on the IRS website… So, losses from a federal disaster (Hurricane Ian), are only deductible if they are over 10% of our income?? So, I would have to have losses of over 10% of $32,000 (or $3200) ? We have no mortgage on our home. Our homeowner’s insurance has a deductible of $7000. Now that i have given you additional figures, can you offer any more advice? Thank you so much.
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Yep.
Actually a bit more, since you usually sell some stocks presumably at a gain. You have to include the gain as part of your income.
Since you seem to lack a lot of itemized deductions, the loss from the hurricane may not actually provide any benefit if including that in your itemized deductions is still less than the standard deduction ($24k+ assuming the “we” means you are married).
–Peter
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Hi Again guys. We have figured our hurricane losses to be about $17,000. Our income is about $32,000. (married filing jointly). We are retired and sell stocks to live off of every year, but we try to sell winning stocks and offset those with losing stocks - so we try to make it a “wash” on our stock selling. Our only other itemized things are a little medical costs (which I don’t think are above the 5% of our income this year also). So… our hurricane losses are above the 10% of our income, but since they are below the standard deduction of $24K it will not matter? Gosh, how crazy. Thanks again for trying to explain all this to me.
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Not unless you can come up with some additional itemized deductions. Since you are in Florida, you don’t have an income tax, but are your property taxes and charitable contributions enough to push you over the standard deduction?
That said, with $32k in income, minus the standard deduction, you are only going to be paying taxes at the 10% rate - so there’s not a lot to be gained by trying to push yourselves over the standard deduction.
AJ
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Thanks AJ. Our property taxes were about $2000 I think, and charitable contributions maybe $1000. It looks like I won’t get up to the standard deduction. Oh well… I at least feel better having done a little research - (uh, asking questions on this board… LOL). I really appreciate your help. Thanks also for your instructions on how to deal with these new boards. It REALLY helped. Thank you. --Footsox