Can I write off expenses from an apartment fire?

Q: Can I write off expenses due to fire in our apartment? --Ravi, Medford

The following answer was provided by Mark Misselbeck, CPA, Levine Katz Nannis & Solomon PC, Needham.

A: A fire in your apartment constitutes a casualty loss. To the extent that insurance does not cover the loss, you MAY have a deduction. You need to prepare a Form 4684 (call the IRS at 1-800-829-3636 for the Form and instructions). Figure out the amount of loss on property and expenses during the restoration of the apartment. Reduce each separate casualty loss by $100 (equivalent to an insurance policy deductible). Then aggregate ALL casualties you suffered during the year and reduce the total by 10% of your Adjusted Gross Income (the last amount on page 1 of your Form 1040 [long form], before you carry the amount over onto the second page of the return). If there is anything in excess of that amount, you have a deductible casualty loss.