Deducting Casualty (Disaster) Losses
The Doug LaMalfa Federal Disaster Tax Relief Certainty Act was signed into law on 9/11/26. This bipartisan bill makes it easier for taxpayers to deduct losses from federally declared disasters occurring after July 4, 2025, and before Jan. 1, 2027. Qualifying losses (above a $500 floor) can be added to the standard deduction, so non-itemizers can benefit, and the 10% AGI threshold has been eliminated.
The law also excludes qualified wildfire relief payments from 2026 income for federally declared wildfires in 2025 and 2026.
351 Conversions
The IRS released Notice 2026-62 this week, which took aim at several popular tax avoidance strategies, or as the IRS referred to them, "Potentially Abusive Investment Fund Strategies Involving Financial Products". One of the strategies highlighted in the IRS notice is the so-called 351 conversion, in which investors exchange concentrated stock positions for shares of a newly formed, diversified ETF without realizing capital gains taxes. In a companion ruling (Rev. Rul. 2026-20), the IRS concluded that some of these conversions are taxable, though the notice expresses no view on 351 transactions where the contributed securities fit the ETF's investment strategy and are expected to be held.
Referring to the conversions the IRS targeted, Treasury Secretary Scott Bessent said on X that "Our message on these conversions is clear: they don't work under existing law." The notice does not contain an effective date, indicating that the IRS appears to view it as an application of existing law, and applicable to transactions that have already taken place.
Recent GLP-1 Findings
GLP-1 medications like Ozempic, Wegovy, and Mounjaro can lower the risk of heart problems, but a study from Washington University School of Medicine suggests those benefits fade quickly once treatment stops. Researchers followed more than 333,000 veterans with type 2 diabetes for up to three years. Those who stayed on a GLP-1 throughout had an 18% lower risk of major cardiovascular events (heart attack, stroke, and death) than those taking an older diabetes medication. After two years off the drug, risk was 22% higher than for those who kept taking it. If you're considering stopping, talk with your doctor first.
Upcoming Webinar
On October 20th at 12:00pm ET, we are hosting a webinar on the 4% rule. In this webinar, Jonathan C. Harrington, CFP®, MSFP, MST will discuss where the rule came from, how the research has evolved over time, and the considerations involved when applying rules of thumb like this to retirement planning.
Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Talk to an advisor or call (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.
Disclaimer: This is not to be considered investment, tax, or financial advice. Please review your personal situation with your tax and/or financial advisor. Milestone Financial Planning, LLC (Milestone) is a fee-only financial planning firm and registered investment advisor in Bedford, NH. Milestone works with clients on a long-term, ongoing basis. Our fees are based on the assets that we manage and may include an annual financial planning subscription fee. Clients receive financial planning, tax planning, retirement planning, and investment management services and have unlimited access to our advisors. We receive no commissions or referral fees. We put our client’s interests first. If you need assistance with your investments or financial planning, please reach out to one of our fee-only advisors. Advisory services are only offered to clients or prospective clients where Milestone and its representatives are properly licensed or exempt from licensure. Past performance shown is not indicative of future results, which could differ substantially.
