Our hearts go out to anyone who has experienced the Sunday morning, Napa Valley earthquake. Although news reports have emphasized that injuries are at a minimum, the extent of property damage is yet to be determined. The area is home for many older historic structures that may not be earthquake safe.

I have spent years studying the tax and financial aspects of recovering after a disaster. My interest in the subject stems in part from having personally experienced a major loss as a result of a large disaster — the 6.7 magnitude Northridge earthquake in 1994.

One thing I learned is that when a disaster strikes, your life will change. The change may be temporary or permanent. Whether it’s a flood, fire, hurricane, tornado, winter storm or — as was experienced this weekend, an earthquake — suddenly many of the necessities of daily life we depend on will not work or are not available – basics such as food, water, warmth and even clean air may be impaired. Electricity, and thus refrigeration, gas (heating & cooking) and city water may be interrupted. The ability to drive (due to injury or road damage) may be impaired. You may need to evacuate quickly to obtain food, water, and shelter, and to avoid imminent danger. Your recovery should start as soon a possible. For advice on the immediate action required, please visit my blog for tips on action immediately following a disaster.

Top 10 Post-Disaster Tax Tips

Not only are personal lives changed, businesses are also affected. Inventories of valuable wines may be lost forever. Buildings damaged or destroyed.

It is equally important to be aware of potential income tax consequences if you have experienced property damage. For an overview of the potential concerns, please see The Top 10 Post-Disaster Tax Tips.

Other posts on the blog will also be useful.

If you have any questions regarding your tax situation following a disaster, or more general questions about recovering from a disaster, please call me at (805) 497-4411. — John Trapani, CPA