Can I claim casualty loss deduction for AC unit damaged after tornado power surge?

You might be able to claim this as a casualty loss. The IRS defines a casualty as damage from a sudden, unexpected, or unusual event - which a tornado definitely qualifies as. The fact that the power surge happened as a direct result of the tornado should work in your favor. However, there are some important limitations to keep in mind. First, casualty losses for personal property are only deductible if they're from a federally declared disaster area. Was your area declared a disaster zone? Second, you'll need to reduce your loss by any insurance reimbursement (sounds like zero in your case), and then you have to reduce it by $100, and then by 10% of your adjusted gross income. So if your AGI is $75,000, you'd subtract $7,500 from your loss, leaving very little to actually deduct. You'll need to document everything - photos of damage, repair receipts, insurance claim denial, and proof connecting the power surge to the tornado.

I went through something similar with hail damage to my roof and HVAC system last year. I was totally confused about all the tax stuff until I used https://taxr.ai to analyze my insurance paperwork and repair receipts. Their system actually identified some additional casualty loss deductions I could take that I had no idea about! The tool reviewed my insurance claim denial letter and explained exactly how to document the connection between the storm and the damage for tax purposes. It also generated the proper figures for Form 4684 and told me what supporting documents to keep in case of an audit. Seriously saved me hours of research.

I just wanted to follow up - I decided to try https://taxr.ai after my skepticism and I'm glad I did. It analyzed my homeowners insurance claim denial (we had wildfire smoke damage not fully covered) and clearly showed which portions qualified for casualty loss treatment. The document analysis caught that my insurance had classified certain damage as "gradual deterioration" to avoid covering it, but the system explained how to properly document it as sudden disaster-related damage for tax purposes. It saved me from missing out on about $3,200 in deductions! The guidance on substantiation requirements was super detailed - definitely more than I would have known to gather on my own.

If you're getting nowhere with the casualty loss angle, you might want to try talking directly to the IRS. I know it sounds crazy but I had a somewhat similar situation and needed clarification on what qualified. I called the IRS for like 3 weeks straight and kept getting the "due to high call volume" message until I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in about 20 minutes who specifically dealt with casualty loss questions. The agent explained exactly what documentation I needed for my scenario and confirmed that secondary damage from a disaster (like power surge damage) does qualify if you can prove the connection. Saved me from filing incorrectly and potentially facing issues later.

I need to eat crow here. After dismissing the Claimyr thing as too good to be true, I decided to try it because I've been trying to get clarity on a complex tax question for weeks. Using https://claimyr.com actually got me through to an IRS representative in about 15 minutes! The agent I spoke with was surprisingly knowledgeable about casualty losses and confirmed that power surge damage from a storm absolutely qualifies if you can document the causal connection. She explained that I needed to get a written statement from an electrician or utility company confirming the damage was likely caused by the weather event. For anyone in a similar situation, don't waste weeks trying to get through on your own. That service legitimately works and the answers I got directly from the IRS were much more helpful than any of the general advice I found online.

Make sure you check if your homeowners insurance policy has any additional coverages you might have missed. Many policies have endorsements for power surge protection that aren't part of the standard coverage. I initially thought my policy didn't cover a similar situation, but when I had my agent review the full policy, there was a separate "electrical current damage" endorsement with a different deductible. Worth double-checking before going down the tax deduction route.

Has anyone used TurboTax for reporting casualty losses? I'm trying to figure out if their deluxe version handles Form 4684 or if I need to upgrade to their premier version for this.

I dealt with a similar situation after Hurricane Laura damaged my home's electrical system. The key thing that helped me was getting a detailed report from a certified electrician explaining how the power surge was directly caused by the storm's impact on the electrical grid. The IRS agent I spoke with (after calling multiple times) emphasized that you need to establish a clear causal chain between the federally declared disaster and the damage. In my case, the electrician's report specifically stated that the power surge occurred due to electrical grid failures caused by the hurricane, not from normal electrical issues. Also, don't forget to check if your state offers any additional disaster relief programs. Some states have property tax relief or other programs that can help offset costs even if the federal casualty loss deduction doesn't work out due to the AGI limitations. The documentation you gather for the tax deduction can often be used for these other programs too. One more tip - if you do qualify for the deduction, you can actually choose to claim it on either the year the loss occurred or the prior year's return, which might be beneficial depending on your income situation in each year.

I work as a tax preparer and see casualty loss claims fairly often. Your situation definitely has potential, but there are a few key things to focus on: 1. **Timing documentation is crucial** - You'll need to prove the power surge happened as a direct result of the tornado. Utility company reports from that day showing grid failures, local news reports about widespread power issues after the storm, or even social media posts with timestamps can help establish this connection. 2. **Get professional documentation** - As others mentioned, an electrician's written assessment is valuable, but make sure they specifically state that the damage pattern is consistent with power surge damage rather than normal wear/failure. 3. **Check the disaster declaration date carefully** - Make sure your loss occurred during the disaster period. Sometimes there's a specific window, and damage that occurs days later might not qualify even if it's related. 4. **Consider the election timing** - You have until the due date of the return for the year after the loss occurred to make the election to claim it on the prior year's return. So for 2024 losses, you have until April 15, 2026 to decide whether to claim it on 2023 or 2024 returns. The AGI limitation is tough, but if you had lower income in the prior year, that election could make this worthwhile. Even a small deduction is better than none, and the documentation process might help with any future insurance disputes too.