[{"data":1,"prerenderedAt":97},["ShallowReactive",2],{"guide-flood-fire-damage-tax-records-en-US":3},{"guide":4,"related":76},{"title":5,"seoTitle":6,"description":7,"summary":8,"sections":9,"faq":44,"cta":54,"date":56,"updated":57,"service":58,"order":59,"sources":60,"slug":74,"locale":75},"Tax Records to Keep After Flood or Fire Damage","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 outside 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.",[10,15,21,26,37],{"heading":11,"paragraphs":12},"One set of records, three reviews",[13,14],"After water or fire damage, the same photos, estimates and invoices are read three times. The insurance adjuster uses them to decide what the policy covers. Your CPA uses them to decide whether any loss is deductible and how the rebuild 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 review can come 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.","We are contractors, not tax advisors. What follows 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. 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](\u002Fguides\u002Fflood-fire-damage-first-steps).",{"heading":16,"paragraphs":17},"Personal-use property in 2026",[18,19,20],"Under the One Big Beautiful Bill Act, [the limit on personal casualty losses](https:\u002F\u002Fwww.irs.gov\u002Fforms-pubs\u002Fcasualty-loss-deduction-expanded-and-made-permanent) was made permanent, and from 2026 the eligible losses were widened. 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](https:\u002F\u002Fwww.irs.gov\u002Fpublications\u002Fp547) 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, though many owners assume otherwise.","For basement flooding in New York City, Hurricane Ida in 2021 is the familiar 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":22,"paragraphs":23},"Rental and business property",[24,25],"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](https:\u002F\u002Fwww.irs.gov\u002Fbusinesses\u002Fsmall-businesses-self-employed\u002Ftangible-property-final-regulations), so the rebuild costs are [usually capitalized rather than deducted](\u002Fguides\u002Frental-repair-vs-improvement-tax), 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":27,"list":28},"Records checklist",[29,30,31,32,33,34,35,36],"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; for a home you live in, our guide explains [how improvements, insurance payments and casualty losses change basis](\u002Fguides\u002Fhome-improvements-taxes-when-you-sell)","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":38,"paragraphs":39},"Repair estimates, safe harbors and upgrades",[40,41,42,43],"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 rest 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. These safe harbors, set out in [Revenue Procedure 2018-08](https:\u002F\u002Fwww.irs.gov\u002Fpub\u002Firs-drop\u002Frp-18-08.pdf), cover only a house that the owner occupies in full. They are not available if any part of the house is rented out or used as a home office, or for a co-op or condominium unit. For a federally declared disaster there is also a contractor safe harbor method, which uses the price in a signed, binding contract with an independent licensed contractor that itemizes the cost of restoring the property to its condition before the disaster, with no dollar limit.","The cost of repairs is not itself the casualty loss, but it can serve 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.","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. Those upgrades go beyond restoring prior condition. They are generally improvements rather than repair of the casualty, and both the insurer and your CPA treat them differently from the restoration work.","We [document the scope from the first day](\u002Fservices\u002Frestoration), 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, consult your CPA.",[45,48,51],{"q":46,"a":47},"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":49,"a":50},"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":52,"a":53},"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. The IRS safe harbors apply only to a house the owner occupies in full, not to a house with a rental unit or home office or to a co-op or condominium unit, and your CPA confirms which method, if any, you can use.",{"text":55},"Send photographs of the damage, the date of the loss and your insurance claim number. You receive, at no charge, a written estimate that keeps emergency mitigation, restoration and upgrades on separate lines. A dated photo log for your CPA and adjuster is provided as part of the contracted work.","2026-10-25","2026-10-26","restoration",92,[61,65,68,71],{"title":62,"url":63,"publisher":64},"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":66,"url":67,"publisher":64},"Publication 547 (2025), Casualties, Disasters, and Thefts","https:\u002F\u002Fwww.irs.gov\u002Fpublications\u002Fp547",{"title":69,"url":70,"publisher":64},"Tangible Property Final Regulations","https:\u002F\u002Fwww.irs.gov\u002Fbusinesses\u002Fsmall-businesses-self-employed\u002Ftangible-property-final-regulations",{"title":72,"url":73,"publisher":64},"Revenue Procedure 2018-08: Safe Harbor Methods for Determining Casualty Losses","https:\u002F\u002Fwww.irs.gov\u002Fpub\u002Firs-drop\u002Frp-18-08.pdf","flood-fire-damage-tax-records","en-US",[77,82,87,92],{"slug":78,"title":79,"description":80,"service":58,"date":81,"updated":56},"flood-fire-damage-first-steps","First steps after a flood or fire for NYC and Long Island property owners","What to do in the first days after water or fire damage: safety, power, documentation for insurance, drying and choosing what to rebuild.","2026-10-24",{"slug":83,"title":84,"description":85,"service":86,"date":81,"updated":56},"rental-turnover-cost-tips","Reducing turnover and maintenance costs on rental units","Practical ways for NYC and Long Island landlords to shorten vacancy and spend less on each turnover: standard finishes, durable materials and planned maintenance.","rental",{"slug":88,"title":89,"description":90,"service":91,"date":81,"updated":57},"building-maintenance-checklist","A maintenance checklist for small building owners in NYC","Seasonal and yearly maintenance for small multifamily and mixed-use buildings in New York City, plus the inspections that apply to many of them.","maintenance",{"slug":93,"title":94,"description":95,"service":96,"date":56,"updated":57},"nyc-local-law-92-94-roof-replacement","Replacing a NYC Roof Under Local Laws 92 and 94","When a NYC roof replacement must add solar or a green roof under Local Laws 92 and 94, which jobs are exempt, and how to file both as one project.","roofing",1793066401560]