Casualty and Theft Tax Deduction

The loss from theft or a natural disaster is deductible.

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What is a casualty and theft loss tax deduction

If your loss was unpreventable, then a tax deduction is allowed.

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Claiming casualty and theft tax deductions

A percentage of your loss is deductible; although the amount varies depending on your AGI and the value of your loss.

To take the deduction, you need to know its fair market value and its cost. You can claim the lower of these two amounts.

Casualty and theft tax deductions: the details

You need the following:

  • A description of your casualty or loss
  • The date of occurrence
  • Proof that you owned the property
  • Proof of the original cost of the property
  • The fair market value at the time of the loss
  • The amount of any reimbursement you received.

Use IRS Form 4684 to figure your allowable casualty and loss tax deduction, which is then entered on Schedule A,

Related IRS publications

Get more information about casualty and theft tax deductions from IRS Publication 547

For more help, use IRS workbooks: Publication 584 for personal use property, and Publication 584b for lost business property.

For a paper tax return, attach IRS Form 4684, and fill in the appropriate line in Schedule A. (If you e-file, all of this will be done for you electronically.)

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