1. Home
  2. Taxes General Forum
  3. What to expect after total business loss from Hurricane

What to expect after total business loss from Hurricane

We lost our business because of hurricane Micheal. A description may be useful. We had a custom built pontoon boat that sat in a marina, we sold shrimp from the boat, we had the business for 18 years. The boat was destroyed in the hurricane, we had no insurance. Every item left, 10 freezers, two ice machines, a van and misc. other items have all been fully depreciated. I had to sell about 5200lbs of shrimp at less than cost just to get rid of it, we had no electricity for 8 days. I threw away another 600lbs to 800 lbs that I didn't consider edible. So, I expect as items are sold off the revenue will be counted as current income. Do I have any losses that I can write off? The boat is a loss, the business is gone. I'm looking at the total loss of my business and I'm ending up with income rather than losses. Any good news on how my taxes will be affected.

Mikek

Reply to
amdx
Loading thread data ...

I met with a new* tax guy today, looks like I can just keep and drive the van we used for business without any tax affect, when I sell it years from now, any proceeds will be included as ordinary income. Any proceeds from the misc. items listed above will be ordinary income, unless they bring in more than I originally paid, that's not likely. The shrimp will just be cost minus sale price and that loss will come off income. The shrimp I dumped is just a loss and will come off income. No write off for the business loss. So no good news, I just pay the taxes.

A little bright spot, since we no longer work we no long need to pay that 15.3% SS and medicare tax. :-) Now, should I do Roth Conversions while I'm in the 12% tax bracket?

  • My old tax guy died and his business was taken over by this new guy.
Reply to
amdx

Death and taxes....

Although, there might be some depreciation recapture from the van. Hard to say. Your new tax guy probably knows what he's doing.

-- Arthur L. Rubin, AFSP, CRTP, Brea, CA

Reply to
Arthur Rubin

I don't have a proper response for you, but your new tax guy, if you are quoting him correctly, sounds like he is way off base.

Reply to
Taxed and Spent

I assume you are not a fisherman. Any shrimp you sell was purchased by you.

The boat is a casualty loss. Your casualty loss is your adjusted basis in the boat. All of the furniture and fixtures and equipment that was also destroyed by the hurricane is a casualty loss valued at your adjusted basis. This basis appears to be zero. Any salvage value on the F&F & equipment offsets any casualty loss on the boat. See IRS Pub 547 on how you report a casualty loss for a business.

The shrimp you sold goes on your Schedule C as gross receipts. This would be offset on your Schedule C by your cost for those shrimp. As to the shrimp you tossed away... you have a choice when it comes to inventory held for sale to others. Keep it on the Schedule C based on the difference before your opening inventory and closing inventory. Or.. treat it as a casualty loss and make an adjustment to either your opening inventory or purchases so that you do not double count.

Reply to
Alan

Do you have any direction for me to look into?

Reply to
amdx

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.