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, special limitations did not apply. For tax years 2018 through 2025, if you are an individual, casualty losses of personal-use property are deductible only if the loss is attributable to 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, Personal Information. 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.