Claiming the Loss Individuals may claim their casualty and theft losses as an itemized deduction on Schedule A (Form 1040), Itemized Deductions (or Schedule A (Form 1040NR) PDF, if you’re a nonresident alien).
Can you write off stolen money?
You’ll need the extra documentation in case the IRS asks you to substantiate your claim. If they stole it, you can deduct it. Blackmail, embezzlement, fraud, extortion, robbery, burglary – it’s all fair game under the IRS’ definition of theft. You can deduct only the amount of loss that was not reimbursed by insurance.
How to report casualty, disaster and theft losses?
Report casualty and theft losses on Form 4684, Casualties and Thefts PDF. Use Section A for personal-use property and Section B for business or income-producing property. If personal-use property was damaged, destroyed or stolen, you may wish to refer to Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property).
How are casualty losses treated on the tax return?
Insurance proceeds that taxpayers receive for insured losses generally reduce the amount of casualty loss deductions they may claim.
How is the amount of a casualty determined?
For all three categories of casualty loss, a taxpayer must establish the amount of the loss by obtaining an appraisal that measures the difference between the fair market value (FMV) of the damaged property immediately before and immediately after the occurrence of the casualty.
When to postpone casualty or theft loss deduction?
If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, don’t consider the gain you are postponing when figuring your casualty or theft loss deduction. See 10% Rule under Deduction Limits, earlier. .
