Eaton Fire
Tax Consultation
You lost your home. You lost the things that mattered — the photos, the furniture your grandmother left you, the irreplaceable pieces of a life you built. And now, on top of everything else, someone is telling you that you might owe taxes on the insurance money you received.
What the hell? You lost everything, and now the IRS wants a piece of it too?
We get it. We've been sitting with Eaton Fire clients since January working through exactly this. And the honest answer is: yes, the tax situation is real and it's complex — but it's also solvable. The problem is that most preparers haven't seen this specific combination of insurance proceeds, Edison settlements, and the two-year timing question before. General advice applied to your specific facts can cost you five to six figures.
You've already been through enough. You shouldn't have to guess on this too.
This page is written primarily for Eaton Canyon Fire survivors, but the same tax framework — insurance proceeds, Edison or utility settlements, §1033 elections, casualty loss timing — applies equally to survivors of the Palisades Fire and Malibu. If you were affected by any of the January 2025 Los Angeles fires, everything here applies to you.
This consultation is for you if:
You don't need to check all of these. One is enough.
You bought your home before 2010 and aren't sure whether you have a gain or a loss — because insurance feeling inadequate and having a taxable gain are two different things that can both be true at once
Your preparer hasn't specifically mentioned the §1033 election, your adjusted basis, or asked you how you plan to handle the Edison settlement
You're trying to decide whether to file a casualty loss on your 2025 return now, or wait until Edison settles — and you want to see the actual math before you commit
You have a pending Edison claim and you want to understand how the settlement allocation — property damage vs. physical injury vs. emotional distress — will affect your taxes before you sign anything
You already filed your 2025 return and you're not confident the right elections and disclosures are in it
You're a renter who received an Edison settlement and wants to understand what's taxable and how to document physical injury before anything is finalized
You just want someone who has been through dozens of these specific situations to look at your facts and tell you plainly what to do
What the consultation delivers
One focused engagement. Specific to your facts. Written deliverables you can hand to your preparer.
Your lane — confirmed with your actual numbers
We calculate your adjusted basis, compare it to your insurance proceeds, and tell you definitively whether you're looking at a gain, a real loss, a timing decision, or a renter situation. No more guessing from general descriptions.
Two-year tax model — 2025 and 2027
The full picture: what filing in 2025 costs, what waiting for Edison costs, and what the settlement will do to both scenarios given your specific income, basis, and insurance facts. Numbers you can actually make a decision with.
§1033 election language — drafted if it applies
If you're a gain client, we draft the specific written statement that must be attached to your 2025 return to defer the gain. This is not a standard form — it requires language tailored to your situation. Missing it costs up to $109,350 on a single transaction.
Edison settlement allocation guidance
A plain-language explanation of how each component of your expected Edison settlement will be taxed — and what allocation language to ask your attorney to negotiate before you sign. Physical injury documentation is often worth $13,000+ and closes the moment you sign.
A specific, written recommendation you can act on
Not "it depends." A clear position on what to do on your 2025 return — with the rationale — so you and your preparer know exactly what you're filing and why. Something to hand to whoever is preparing your return.
— Heather M., referred client
Adam Libman, CRTP
California Registered Tax Preparer · 25 Years in Tax Controversy
I am not a CPA. I am not an EA. I am not an attorney. I am a California Registered Tax Preparer with 25 years in tax controversy and over 100,000 returns processed. I've been working specifically on Eaton Fire situations since January — the intersection of §1033 elections, casualty loss timing, and Edison settlement allocation is genuinely unusual territory, and most preparers haven't seen it before.
CRTPs are authorized to prepare California and federal returns, appear before the IRS, and provide tax consulting. What I can do for you: tell you exactly what your numbers mean and what to put on your return. What I cannot do: provide legal advice on your Edison lawsuit or settlement negotiation strategy.
Book Your Eaton Fire Tax Consultation
One focused session. Your basis, your insurance, your Edison situation, your 2025 return. Written deliverables you can act on.
01
Send your situation
A few sentences about your situation — owner or renter, year purchased, rough insurance, whether you've filed yet
02
We confirm the fit
We'll confirm this is the right engagement for your situation and answer a basic orienting question
03
We work through it
Basis calculation, tax model, election language, Edison guidance, and a written recommendation
The blog teaches you the map.
I tell you where the landmines are on yours.
Every post on this site is free. Here's what you can't get from reading them:
🔍 Stress-test your assumptions
Your situation is messier than any framework. I ask the questions you don't know to ask — about your basis, your insurance allocation, your Edison timeline, your attorney's settlement language. I find what's wrong before the IRS does.
🗺 Know which lane you're actually in
The five lanes look clean on paper. Real situations are always messier. I've worked through 20+ Eaton Fire cases. One wrong lane assignment can cost you $100,000.
📋 File the return correctly
Knowing what should go on your return and knowing how to prepare it are two different things. I prepare the return, draft the election language with your actual numbers, and make sure the IRS sees exactly what you intend.
⚖️ Bridge tax and legal strategy
Your Edison attorney is negotiating the settlement. Your insurance attorney is working the claim. Neither is thinking about your tax position. I bridge that gap before you sign anything that locks in a bad outcome.
🛡 Audit representation included in your fee
I back up what I put in writing. If we file it together and the IRS questions it, I'm in the room with you — not sending you back to figure it out alone. I've been doing this for 25 years and I'm not going anywhere. That's not a marketing line. It's a track record.
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