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.

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165 is important because a business expense is deductible when paid or incurred, while a casualty loss is deductible only when sustained and if not compensated for by insurance or otherwise.

Casualty losses and expenditures under Sec. 162 or 165

"If you lose something out of theft-that is still considered as casualty loss. So, kung nawalan ka sa pagnanakaw, pareho yun sa nawalan ka dahil doon sa storm (Yolanda').

Losses due to looters may be declared as income tax deductible-Henares

A special rule for people whose homes were ordered (within 120 days of the disaster) to be demolished enables them to deduct the loss of their home as a disaster casualty loss (vs.

Tax relief available for many in wake of superstorm

A taxpayer also is deemed to substantially increase the economic useful life of a unit of property if the taxpayer "properly" deducts a casualty loss under section 165 with respect to the unit of property and the amounts restore the unit of property to a condition that is the same or better than before the casualty.

An overview of the proposed "tangibles" regulations

Some of these costs may be reflected in the decrease in fair market value, calculated as part of the determination of a casualty loss. Further, the cost of temporary housing, renting a car, or replacing lost or stolen property isn't deductible.

Tax issues for individual victims of natural disasters

The casualty gain anomaly exists because a casualty loss is measured by the lesser of these: the decrease in the fair market value of the property due to the casualty or the taxpayer's basis in the property immediately before the casualty.

Help clients avoid casualty gain trap after disasters: the rules can be complex and often require a pre-emptive planning approach

The IRS argued that the gambling losses did not qualify as an "other casualty" and that a casualty loss can be deducted only when there is physical damage to the taxpayer's property.

Casualty loss deduction from drug-induced gambling is disallowed: The Tax Court declines to expand 'other casualty' beyond one sustained with respect to tangible property

This change by the TCJA has caused some retirement plan experts to wonder whether this narrow definition of casualty loss would also affect the availability of hardship withdrawals from Code Section 401(k) plans.

OP-ED: Adjust now for changes coming to retirement plans

According to insurancebusinessmag, Sedgwick Ireland CEO Malcolm Hughes, said, 'Sproule Graham will add considerable experience, expertise, and a strategic geographic footprint to our market-leading casualty loss adjusting operations.

Sedgwick takes over Sproule Graham

In order for a casualty loss to be deductible, the event causing the loss must be sudden, unexpected, and unusual in nature.

15 Questions Answered about Flood Damage: Using Insurance and Tax Deductions to Mitigate Losses

Thus, a personal casualty loss of $100 or less is disregarded.

Personal casualty losses from natural disasters

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