[{"data":1,"prerenderedAt":112},["ShallowReactive",2],{"guide-flood-fire-damage-tax-records-en-US":3},{"guide":4,"related":92},{"title":5,"seoTitle":6,"description":7,"summary":8,"sections":9,"faq":52,"date":65,"service":66,"order":67,"sources":68,"slug":90,"locale":91},"Tax records to keep after flood or fire damage, and the 2026 change for state-declared disasters","Tax Records After Flood or Fire Damage","Records NYC and Long Island owners should keep after flood or fire damage, the 2026 rule for state-declared disasters, and how rental property differs.","Beginning in 2026, a casualty loss on personal-use property such as your home is deductible only if it is attributable to a federally declared or state-declared disaster, and the $100 and 10%-of-AGI reductions still apply. A house fire or burst pipe that is not part of a declared disaster is generally not deductible for a personal residence, while losses on rental and business property follow different rules. The same records support the insurance claim, the tax analysis and the rebuild permits, so they should be kept from the first day.",[10,15,20,26,31,42,47],{"heading":11,"paragraphs":12},"Scope of this guide",[13,14],"We are a contractor, not tax advisors. This guide explains how project scope, timing and paperwork affect what you can discuss with your tax professional. It is not tax, legal or accounting advice. Tax rules change and depend on your situation. Before you make decisions, consult a CPA, such as Copper River Tax (copperrivertax.com). Outstanding Construction does not prepare tax returns and is not responsible for any tax position you take.","The rules below were checked against IRS guidance in October 2026. For safety, power and drying in the first days after a loss, see our guide to first steps after a flood or fire.",{"heading":16,"paragraphs":17},"One set of records serves three purposes",[18,19],"After water or fire damage, the same photos, estimates and invoices are used three times. Your insurance adjuster uses them to determine what the policy covers. Your CPA uses them to determine whether any loss is deductible and how rebuilding costs are treated. The Department of Buildings or your town building department relies on the scope of work to issue permits and sign off on the rebuild.","Each of these reviews can take place months after the work is finished, and the details that matter are easiest to record while the damage is still visible. We document conditions from the first visit for that reason. We are not public adjusters and do not negotiate claims.",{"heading":21,"paragraphs":22},"What changed in 2026 for personal-use property",[23,24,25],"Under the One Big Beautiful Bill Act, the limit on personal casualty losses was made permanent, and beginning in 2026 the eligible losses were expanded. The IRS states that a personal casualty loss deduction is no longer limited to losses attributable to federally declared disasters, and may also include losses from state-declared disasters, provided all other requirements of Internal Revenue Code section 165 are met.","The usual reductions still apply. IRS Publication 547 requires each personal casualty loss to be reduced by $100 and the total to be reduced by 10% of adjusted gross income, with special rules for certain qualified disaster losses. The election to claim a disaster loss on the prior year's return applies to federally declared disasters. In practice, a house fire, a burst pipe or a sewer backup that is not part of a declared disaster is generally not deductible for a personal residence, even though many owners assume it is.","For basement flooding in New York City, Hurricane Ida in 2021 is a well-known example of a federally declared disaster. To check whether a current event has been declared, consult the FEMA disaster declarations database and announcements from the Governor's office, and confirm the result with your CPA.",{"heading":27,"paragraphs":28},"Rental and business property",[29,30],"Casualty losses on rental and business property are not limited to declared disasters. Publication 547 explains that the loss is generally measured by the decrease in fair market value or the adjusted basis, whichever is less, reduced by insurance or other reimbursement; for property that is completely destroyed, the adjusted basis is used. These losses are reported in Section B of Form 4684.","Rebuilding a damaged building is generally a restoration under the federal repair and improvement rules, so the rebuild costs are usually capitalized rather than deducted, even when the work returns the property to its previous condition. If insurance proceeds exceed your adjusted basis, the result can be a taxable gain, and rules for postponing that gain may apply. Lost rent, temporary housing for tenants and the timing of insurance payments are also questions for your CPA.",{"heading":32,"list":33},"Records checklist",[34,35,36,37,38,39,40,41],"Photos and video of every affected room before cleanup, with dates, and of damaged materials before they are removed","Photos of the property before the loss, if available, and purchase records and receipts for past improvements, which establish adjusted basis","The insurance policy, claim number, adjuster estimates, correspondence and records of every payment","Emergency mitigation invoices, such as water extraction, drying, board-up and roof tarping, kept separate from rebuild invoices","Moisture readings and drying logs","Rebuild estimates and invoices that separate work restoring prior condition from upgrades","Permits, inspection results and sign-offs, and any fire department or incident report","Appraisals, if any were made before or after the loss",{"heading":43,"paragraphs":44},"Repair estimates and the IRS safe harbor methods",[45,46],"Publication 547 (2025) describes safe harbor methods that individuals may use to measure the decrease in value of personal-use residential property. Two of them depend directly on contractor estimates. The estimated repair cost method uses the lesser of two repair estimates prepared by separate and independent licensed contractors, which must itemize the cost of restoring the property to its condition immediately before the casualty; it is limited to losses of $20,000 or less. The de minimis method uses a written good-faith estimate of repair cost and is limited to losses of $5,000 or less.","The cost of repairs is not itself the casualty loss, but it can be used as a measure of the decrease in value when the repairs are actually made, are necessary to restore the property, are not excessive, address only the damage and do not leave the property more valuable than before. Whether a safe harbor applies, and which one, is for your CPA to decide. We can provide an itemized restoration estimate that separates the cost of restoring prior condition from any upgrades.",{"heading":48,"paragraphs":49},"Keep upgrades on separate lines",[50,51],"Rebuilding is often the right time to improve a basement or kitchen: raised outlets, moisture-resistant drywall, vinyl plank flooring, a backwater valve or a larger electrical service. These upgrades go beyond restoring prior condition. They are generally improvements rather than repair of the casualty, and both the insurer and your CPA will treat them differently from the restoration work.","We document the scope from the first day, keep emergency mitigation, restoration and upgrades on separate invoice lines, and provide dated photo logs and moisture readings with the estimate. Electrical and plumbing repairs are performed with our licensed partner trades, under permit where required. For tax questions, including any IRS letter you receive about a casualty loss, consult a CPA such as Copper River Tax.",[53,56,59,62],{"q":54,"a":55},"Can I deduct fire damage to my own home?","Generally only if the loss is attributable to a federally declared disaster or, beginning in 2026, a state-declared disaster, and only after the $100 and 10%-of-AGI reductions. A house fire outside a declared disaster is usually not deductible for a personal residence. Your CPA can confirm how this applies to you.",{"q":57,"a":58},"Is basement flood damage in my rental property deductible?","Casualty losses on rental property are not limited to declared disasters. The amount depends on the decrease in value, your adjusted basis and any insurance payment, and rebuild costs are generally capitalized. Your CPA makes these calculations.",{"q":60,"a":61},"Will you prepare an estimate I can use for the IRS repair cost method?","We provide itemized restoration estimates that show the cost of restoring the property to its prior condition, with upgrades listed separately. The method requires two estimates from separate and independent licensed contractors, and your CPA decides whether it applies.",{"q":63,"a":64},"Do upgrades added during the rebuild count as part of the loss?","No. Upgrades beyond prior condition are generally improvements, not repair of the casualty. Keeping them on separate lines helps your adjuster and your CPA treat each part correctly.","2026-10-25","restoration",92,[69,73,76,79,83,87],{"title":70,"url":71,"publisher":72},"Casualty loss deduction expanded and made permanent","https:\u002F\u002Fwww.irs.gov\u002Fforms-pubs\u002Fcasualty-loss-deduction-expanded-and-made-permanent","Internal Revenue Service",{"title":74,"url":75,"publisher":72},"Publication 547 (2025), Casualties, Disasters, and Thefts","https:\u002F\u002Fwww.irs.gov\u002Fpublications\u002Fp547",{"title":77,"url":78,"publisher":72},"Tangible Property Final Regulations","https:\u002F\u002Fwww.irs.gov\u002Fbusinesses\u002Fsmall-businesses-self-employed\u002Ftangible-property-final-regulations",{"title":80,"url":81,"publisher":82},"Services","https:\u002F\u002Fcopperrivertax.com\u002Fen-US\u002Fservice","Copper River Tax",{"title":84,"url":85,"publisher":86},"服务项目","https:\u002F\u002Fcopperrivertax.com\u002Fzh-Hans\u002Fservice","铜河税务 (Copper River Tax)",{"title":88,"url":89,"publisher":82},"Tax Notice & Penalty Handling","https:\u002F\u002Fcopperrivertax.com\u002Fen-US\u002Fservice\u002Ftax-notice-penalty","flood-fire-damage-tax-records","en-US",[93,99,103,108],{"slug":94,"title":95,"description":96,"service":97,"date":98},"nyc-renovation-permits","NYC permits for renovation, electrical and plumbing work","Which renovation, electrical and plumbing jobs need a NYC Department of Buildings permit, who files it, and what changes on Long Island.","electrical","2026-10-24",{"slug":100,"title":101,"description":102,"service":97,"date":98},"electrical-panel-upgrade","Electrical panel and service upgrades for NYC and Long Island homes","When an older NYC or Long Island home needs a new panel or a bigger electrical service, what the work involves, and how long it takes.",{"slug":104,"title":105,"description":106,"service":107,"date":65},"ev-charging-without-service-upgrade","EV charging without an expensive service upgrade","Load sharing, CT-clamp load management, dryer-outlet sharing and right-sized chargers: ways to add EV charging in NYC and Long Island without upgrading your electrical service.","ev-charging",{"slug":109,"title":110,"description":111,"service":107,"date":98},"ev-charger-installation","Installing a home EV charger in NYC or Long Island","Level 1 vs Level 2 charging, panel capacity, permits, Tesla Powershare, and what to know for houses and buildings in NYC and Long Island.",1792924280393]