Casualty Loss


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Casualty loss

A financial loss caused by damage, destruction, or loss of property as a result of an unexpected or unusual event.

Casualty Loss

A loss that occurs as a result of an unforeseen, catastrophic event. Casualty losses can occur, for example, when one drives a car through the garage or when a tornado destroys a business. Financial losses from gradual, environmental degradation would not qualify as casualty losses. One may deduct a casualty loss from one's taxable income, subject to certain conditions. Specifically, the first $100 of a casualty loss is not deductible and one must reduce the amount of the deduction by 10% of one's adjusted gross income. For example, if one suffers a casualty loss of $25,000 and has an adjusted gross income of $100,000, the casualty loss deduction is calculated thusly:

Casualty loss = 25,000 - 100 - (0.10 * 100,000) = $14,900.

Casualty Loss

A casualty is the complete or partial destruction of property resulting from an identifiable event of a sudden, unexpected, or unusual nature. Examples are floods, storms, fires, earthquakes, and auto accidents. Individuals may deduct a casualty loss only if the loss is incurred in a trade or business, in a transaction entered into for profit, or is a personal loss arising from a disaster such as those mentioned above. Individuals deduct personal casualty losses as itemized deductions on Schedule A, subject to a $100 nondeductible amount and a reduction of the loss by 10 percent of the taxpayer's AGI.
References in periodicals archive ?
When property has been expensed or fully depreciated, there is zero basis, so no casualty loss deduction can be claimed.
Taxpayers suffering property damages from any of these disasters probably qualify for casualty loss deductions for federal income tax purposes.
If you lose something out of theft-that is still considered as casualty loss.
burden of proof, the floors involved in calculating a casualty loss, and
1981-702, the Tax Court held that the collapse of a well did not qualify as a casualty loss because its cause was progressive deterioration of the supporting timber sidewalls.
The cost of repairing damage is not, in and of itself, the measure of the casualty loss.
If the taxpayer overestimated expected reimbursements in figuring the casualty loss, the resultant casualty loss understatement should be included as a loss with other losses in the year when the taxpayer can reasonably expect no further reimbursement.
As with all personal casualty loss deductions under [section] 165(c)(3), [section] 165(h) limits the deduction to losses exceeding $100 and 10 percent of the taxpayer's adjusted gross income for the tax year.
Although it may be a small consolation if you've experienced property damage, you may be able to deduct a casualty loss on your 2006 tax return.
These gains were partially offset by increased costs to support growth and a small casualty loss.
Taxpayers must take consistent positions in defining a unit of property under the proposed tangibles regulations and under the casualty loss rules of section 165.
The Greens then claimed a casualty loss on their tax return for the judgment they couldn't recover.