Complicated taxes and questions about earthquake tax deductions

ANCHORAGE (KTUU) — Sherry Whah is surrounded by boxes and files. As she crunches the numbers on tax files, a co-worker heats up soup about seven feet away.

"Pretty cramped," Whah, a tax preparer, joked.

Her usual office in this midtown duplex is downstairs, but major water damage caused by flooding in her office building after the earthquake rendered her workspace uninhabitable.

Files full of tax papers and receipts were destroyed. Signs warning of asbestos cover two rooms.

"The water was standing high, the smell and the mess and the wet, it was just horrendous," Whah said.

Whah says she's kept all her receipts and she's taken pictures of the damage, but reporting itemized deductions under a rule called 'casualty loss' can only happen if the governor's disaster declaration is accepted.

"It allows us to take that loss, without it being a federally declared disaster area — you cannot write off personally that casualty lose," Whah said. "It's gone. So what do you do with that loss? I mean, talk to these poor people in Eagle River who's homes have been declared inhabitable. What are they going to do?"

Initial damage assessments and costs for things like temporary housing have reached around $100 million according to figures provided by the state.

The state says the governor submitted the declaration on Dec. 3rd and has not heard back from FEMA yet.