| Taxpayers who find themselves the victims of theft or | | | | personal use property only if you itemize deductions |
| natural disaster should understand how to deduct their | | | | on IRS form 1040 Schedule A. You may, however, |
| casualty losses. As a matter of course, you can | | | | claim casualty loss from a federally declared disaster |
| usually deduct losses to your home, household items, | | | | even if you do not itemize your deductions. |
| and automobiles on your federal income tax return. | | | | For 2009, taxpayers must reduce their casualty or |
| You cannot deduct theft and casualty losses covered | | | | theft loss of personal use property by $500 for each |
| by insurance, unless you file a timely claim for | | | | event. |
| reimbursement. You must deduct the amount of the | | | | Casualty or theft losses must be further reduced by |
| reimbursement from your claim. | | | | 10% of your AGI, unless the loss was in the wake of a |
| The cause of the damage must be sudden and | | | | federally declared disaster. |
| unexpected like an automobile accident, fire, flood, | | | | You cannot consider the loss of future income or |
| earthquake, or vandalism. | | | | profits from your casualty or theft claim when |
| If the property in question is personal use property or it | | | | determining the amount of loss. |
| is not entirely destroyed, the amount of casualty or | | | | Casualty losses are generally only deductible for the |
| theft loss becomes the lesser of the adjusted basis of | | | | year in which they occurred. You may, however, |
| your property or the amount of reduction in the fair | | | | deduct casualty losses from a federally declared |
| market value of your property as a result of the | | | | disaster from a previous year's return, even by filing an |
| casualty or theft, minus what you receive or expect to | | | | amended return for that year, if necessary. |
| receive from insurance or any other reimbursement. | | | | If you think that you may qualify for a theft or casualty |
| In the event the damage is a total loss to an income | | | | loss on your income tax or a net disaster loss, you can |
| producing property, the amount of your loss is the | | | | find out more specifics to help you reach a |
| adjusted basis of your property minus any salvage | | | | determination through IRS publication number 547, |
| value and expected reimbursement from insurance | | | | "Casualties, Disasters, and Thefts", or by going to the |
| and/or any other source. | | | | Internal Revenue Service website. |
| Usually, you can claim casualty or theft loss of | | | | |