Amend Canada Tax Act to allow Flood & Disaster Victims to Declare Casualty Losses
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Amend the Canada Income Tax Act to allow under-insured victims of national disasters to declare/deduct Casualty Losses and/or Net Operating Loss (that exceeds income) as an itemized deduction against Income Tax. While Federal DFAA facilitates funding to affected regions and Provincial Disaster Financial Assistance (DFA) programs offer some compensation to individuals; many never recover financially and yet must continue to pay parcel taxes on ruined land/lots, strata fees, mortgage & loan payments... and other expenses that cause hardship given already severely reduced circumstances.
Some of this could be mitigated by a Tax Relief program similar to what the USA – IRS have already established. Below are excerpts from the IRS website that explains their system and could be used as a template for implementing this useful Tax Code Amendment in Canada.
“Casualty Losses - A casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. A casualty doesn't include normal wear and tear or progressive deterioration.”
“However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to treat the casualty loss as having occurred in the year immediately preceding the tax year in which the disaster happened, and you can deduct the loss on your return or amended return for that preceding tax year”
When Your Loss Deduction Exceeds Your Income
“If your loss deduction is more than your income, you may have a net operating loss (NOL). You don't have to be in business to have an NOL from a casualty.
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