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Tax,
LA Fires

Jan. 24, 2025

Tax triage for LA fire victims

Navigating the tax implications of insurance proceeds after a wildfire can be complex, but there are mechanisms in place--like exclusions, deductions, and deferrals--that can help minimize the tax burden for homeowners, especially when considering future lawsuit recoveries and the new federal tax law.

Robert W. Wood

Managing Partner, Wood LLP

333 Sacramento St
San Francisco , California 94111-3601

Phone: (415) 834-0113

Fax: (415) 789-4540

Email: wood@WoodLLP.com

Univ of Chicago Law School

Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.

Alex Z. Brown

Partner, Wood LLP

Shutterstock

If you have recently experienced the loss of your home, you have many issues to consider, and taxes are probably far down on the list. However, some fire victims may be receiving money soon from insurance companies, even if any eventual lawsuit recoveries from Edison or other defendants may be years away. Amounts received following a wildfire are not automatically tax-free, although there are mechanisms that can make them effectively tax-free in many cases.

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