Casualty Loss

Casualty Loss Tax Info

For a casualty loss to be tax deductible, the loss must be defined as a casualty by IRS' definition.

What is the definition of casualty?

Tax law defined a casualty as damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.

A sudden event is one that is swift, not gradual or progressive.

An unexpected event is one that is ordinarily unanticipated and unintended.

An unusual event is one that is not a day to day occurrence and that is not typical of the activity in which you were engaged.

 

Casualty loss and taxes

Deductible Casualty Losses

Nondeductible Casualty Losses

Deducting a Casualty Loss