Casualty Losses
The most frequently asked tax questions related to Casualty Losses
For Tax Payers
Need professional help with a specific tax issue or have general tax questions? Ask a CPA is the easiest way to get advice from a licensed accountant in our network.
Ask a Tax QuestionFor Accountants
Provide answers to tax questions and introduce your practice to new potential clients. Build your CPAdirectory profile and earn reputation points.
Answer Tax QuestionsCasualty Loss - When your loss is deductible
Asked Thursday, March 07, 2013 by an anonymous user
You can generally deduct a casualty or disaster area loss only in the tax year in which the casualty or disaster occurred. You can generally deduct a theft loss only in the year you discovered your property was stolen. However, you can choose to deduct disaster area losses on your return for the year immediately before the year of the disaster if the President has declared your area a federal disaster area.
For details, see Disaster Area Losses in Publication 547.
For details, see Disaster Area Losses in Publication 547.
Casualty Loss - Deduction limits
Asked Thursday, March 07, 2013 by an anonymous user
After you have figured the amount of your loss, as discussed earlier, you must figure how much of the loss you can deduct. You do this on Form 4684, section A. If the loss was to property for your personal use or your family's, there are two limits on the amount you can deduct for your casualty or theft loss.
1.You must reduce each casualty or theft loss by $100 ($100 rule).
2.You must further reduce the total of all your losses by 10% of your adjusted gross income (10% rule).
1.You must reduce each casualty or theft loss by $100 ($100 rule).
2.You must further reduce the total of all your losses by 10% of your adjusted gross income (10% rule).
Casualty Loss - Figuring the Loss
Asked Thursday, March 07, 2013 by an anonymous user
You figure the amount of your loss using the following steps.
1.Determine your cost or other basis in the property before the casualty or theft.
2.Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. (The decrease in FMV is the difference between the property's value immediately before and immediately after the casualty or theft.)
3.From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive
1.Determine your cost or other basis in the property before the casualty or theft.
2.Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. (The decrease in FMV is the difference between the property's value immediately before and immediately after the casualty or theft.)
3.From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive
Casualty loss- Appraiser fees
Asked Wednesday, December 20, 2000 by an anonymous user
Yes. Amounts you paid to an appraiser for determining your casualty loss are deductible as a miscellaneous itemized deduction on IRS Schedule A subject to the 2% MAGI limitation.
Are my termite damage costs considered a deductible casualty loss ?
Asked Tuesday, October 24, 2000 by an anonymous user
No. Any termite or moth damage costs are not considered casualty losses. Generally, casualty losses occur from auto accidents, earthquakes, fires, floods, hurricanes, sonic booms, storms, thefts, tornadoes, vandalism, volcanic eruptions and other accidents.
If I did not file a claim on a casualty loss I incurred, can I still claim a deduction on my tax return?
Asked Thursday, October 12, 2000 by an anonymous user
If you are insured for the full loss you incurred, but you do not file a claim, you cannot claim a deduction on your tax return.
Can I claim a casualty loss from my auto accident that totally demolished my car?
Asked Wednesday, September 27, 2000 by an anonymous user
The amount of your unreimbursed loss may be deductible. The deductible calculation is reported on IRS Form 4684. The deduction would be the amount of the loss, minus any insurance reimbursements minus $100 minus 10% of your Adjusted Gross Income Limitation. If the accident was caused by your driving drunk, then the deduction is disallowed.
Are the costs associated with termite eradication deductible?
Asked Wednesday, September 27, 2000 by an anonymous user
Probably not. Casualty losses must be from sudden, unexpected or unusual events. Termite damage is considered gradual and progressive, and therefore not deductible.
I incurred a casualty loss when I was in a car accident . How much can I deduct ?
Asked Monday, September 11, 2000 by an anonymous user
A casualty or theft loss can be deducted if it is a qualified casualty and the total amount of the loss, minus $100, is more than 10% of your Adjusted Gross Income. Speak to your local CPA about the loss and for his help preparing IRS Form 4684
