The Roni Deutch Tax Center – Tax Help Blog posted another great tax deduction of the week, this time taking on casualty and theft losses as well as how to calculate the deduction you may qualify for if you suffer a significant loss. I have included a section of the article below or head on over to the Tax Help Blog for more great tax advice.
If you suffer the loss of property (including damage and/or destruction) because of a sudden event, then you may qualify for a casualty loss deduction. These events need to be unexpected, such as an earthquake, fire, flood, shipwreck, storm, tornado, vandalism, etc. However, there are a few situations that are not tax-deductible including accidental breaking, pet-related accidents, accidents resulting from willful neglect, or progressive deterioration.
Losses of property due to theft may also be tax deductible. As the IRS explains, “a theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent.” Therefore if you are the victim of a burglary, embezzlement, extortion, ransom, robbery, etc. then you may be able to claim a theft loss deduction.
Calculating the Deduction