Last night I attended a tax seminar about tax handling of disaster losses. It's very complicated, as is most everything to do with the tax code. The presenter was a CPA flown in from California. He has a lot of experience with natural disasters what with all the earthquakes and wildfires in that state.

He was a character, and can barely see. Whenever he needed to see what slide of his Powerpoint he was at, he had to go to his laptop and peer at it closely. His presentation style wasn't the best, and some people left early, but for those of us who stayed to the end, he told us how to find a 'hidden' white paper on his website that covers the entire presentation.

I went in there thinking I was going to get some concise information, but soon realized it was more conceptual, so I just sat back and enjoyed the show. One thing that is hard for people to understand is the difference between how insurance is figured and how taxes are figured. Of course, the two meet because the insurance proceeds offset the disaster loss, and they both require a lot of documentation.

The most important message that I hope the attendees took away was they had better not try to do their own taxes if they are going to declare disaster losses. It's more than a matter of figuring out that $5000 in appliances (for example) were destroyed: you have to figure out their current value the day before the flood, subtract $100 per disaster event, and see if it's greater than 10% of your gross income.

And there are all sorts of mistakes we can make if we look at the short-term benefits without understanding the tax consequences of our decisions. It's always good to find this out sooner or later.