Week in Insights: Casualty Loss Deductions Need Fairer Approach

It may be time to reconsider how the tax code can best assist homeowners who suffer catastrophic losses, as hurricanes and other natural disasters are becoming more frequent and severe.

The current system for casualty loss deductions is outdated and inequitable, given escalating property values and the fluctuating costs of rebuilding.

Casualty losses are deductible only if they are attributable to a federally declared disaster. This means that property damaged or destroyed by other events can’t be claimed as a casualty loss deduction, though this limitation is set to expire in 2025.

But the most impactful qualification ...