Casualties and Thefts – Form 4684

You can deduct casualty and theft losses for both personal use property and income-producing business property. Prior to tax year 2018, you did not have special limitations. However, you can only report a loss caused by a federally declared disaster. Destruction of property by fire, storm, shipwreck, or other casualty and theft by larceny, embezzlement, or robbery is tax deductible.

If you receive more in insurance or other reimbursement than the cost of the damaged property, then your casualty or theft resulted in a gain. You must report this and pay tax. You can only deduct the portion of your loss not covered by reimbursement.

There are some losses you cannot deduct. Lost money or property, items broken under normal conditions, and progressive damage to property caused by insects or disease are not tax deductible.

This entry was posted on Monday, July 2nd, 2018 at 6:15 pm and is filed under Deductions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.