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File 2009 Taxes

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File 2009 Taxes

File 2009 taxes Publication 560 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionSEP plans. File 2009 taxes SIMPLE plans. File 2009 taxes Qualified plans. File 2009 taxes Ordering forms and publications. File 2009 taxes Tax questions. File 2009 taxes Future Developments For the latest information about developments related to Publication 560, such as legislation enacted after we release it, go to www. File 2009 taxes irs. File 2009 taxes gov/pub560. File 2009 taxes What's New Compensation limit increased for 2013 and 2014. File 2009 taxes  For 2013 the maximum compensation used for figuring contributions and benefits increases to $255,000. File 2009 taxes This limit increases to $260,000 for 2014. File 2009 taxes Elective deferral limit for 2013 and 2014. File 2009 taxes  The limit on elective deferrals, other than catch-up contributions, increases to $17,500 for 2013 and remains at $17,500 for 2014. File 2009 taxes These limits apply for participants in SARSEPs, 401(k) plans (excluding SIMPLE plans), section 403(b) plans and section 457(b) plans. File 2009 taxes Defined contribution limit increased for 2013 and 2014. File 2009 taxes  The limit on contributions, other than catch-up contributions, for a participant in a defined contribution plan increases to $51,000 for 2013. File 2009 taxes This limit increases to $52,000 for 2014. File 2009 taxes SIMPLE plan salary reduction contribution limit for 2013 and 2014. File 2009 taxes  The limit on salary reduction contributions, other than catch-up contributions, increases to $12,000 for 2013 and remains at $12,000 for 2014. File 2009 taxes Catch-up contribution limit remains unchanged for 2013 and 2014. File 2009 taxes  A plan can permit participants who are age 50 or over at the end of the calendar year to make catch-up contributions in addition to elective deferrals and SIMPLE plan salary reduction contributions. File 2009 taxes The catch-up contribution limitation for defined contribution plans other than SIMPLE plans remains unchanged at $5,500 for 2013 and 2014. File 2009 taxes The catch-up contribution limitation for SIMPLE plans remains unchanged at $2,500 for 2013 and 2014. File 2009 taxes The catch-up contributions a participant can make for a year cannot exceed the lesser of the following amounts. File 2009 taxes The catch-up contribution limit. File 2009 taxes The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. File 2009 taxes See “Catch-up contributions” under Contribution Limits and Limit on Elective Deferrals in chapters 3 and 4, respectively, for more information. File 2009 taxes All section references are to the Internal Revenue Code, unless otherwise stated. File 2009 taxes Reminders In-plan Roth rollovers. File 2009 taxes  Section 402A(c)(4) provides for a distribution from an individual's account in a 401(k) plan, other than from a designated Roth account, that is rolled over to the individual's designated Roth account in the same plan. File 2009 taxes An in-plan Roth rollover is not treated as a distribution for most purposes. File 2009 taxes Section 402A(c)(4) was added by the Small Business Jobs Act of 2010 and applies to distributions made after September 27, 2010. File 2009 taxes For additional guidance on in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. File 2009 taxes R. File 2009 taxes B. File 2009 taxes 872, available at  www. File 2009 taxes irs. File 2009 taxes gov/irb/2010-51_IRB/ar11. File 2009 taxes html. File 2009 taxes In-plan Roth rollovers expanded. File 2009 taxes  Beginning in 2013, a plan with designated Roth accounts can permit a participant to roll over amounts into a designated Roth account from his or her other accounts in the same plan, regardless of whether the participant is eligible for a distribution from the other accounts. File 2009 taxes Section 402A(c)(4) was amended by the American Taxpayer Relief Act of 2012. File 2009 taxes For more information, see Notice 2013-74, 2013-52 I. File 2009 taxes R. File 2009 taxes B. File 2009 taxes 819, available at www. File 2009 taxes irs. File 2009 taxes gov/irb/2013-52_IRB/ar11. File 2009 taxes html. File 2009 taxes Credit for startup costs. File 2009 taxes  You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP, SIMPLE, or qualified plan. File 2009 taxes The credit equals 50% of the cost to set up and administer the plan and educate employees about the plan, up to a maximum of $500 per year for each of the first 3 years of the plan. File 2009 taxes You can choose to start claiming the credit in the tax year before the tax year in which the plan becomes effective. File 2009 taxes You must have had 100 or fewer employees who received at least $5,000 in compensation from you for the preceding year. File 2009 taxes At least one participant must be a non-highly compensated employee. File 2009 taxes The employees generally cannot be substantially the same employees for whom contributions were made or benefits accrued under a plan of any of the following employers in the 3-tax-year period immediately before the first year to which the credit applies. File 2009 taxes You. File 2009 taxes A member of a controlled group that includes you. File 2009 taxes A predecessor of (1) or (2). File 2009 taxes The credit is part of the general business credit, which can be carried back or forward to other tax years if it cannot be used in the current year. File 2009 taxes However, the part of the general business credit attributable to the small employer pension plan startup cost credit cannot be carried back to a tax year beginning before January 1, 2002. File 2009 taxes You cannot deduct the part of the startup costs equal to the credit claimed for a tax year, but you can choose not to claim the allowable credit for a tax year. File 2009 taxes To take the credit, use Form 8881, Credit for Small Employer Pension Plan Startup Costs. File 2009 taxes Retirement savings contributions credit. File 2009 taxes  Retirement plan participants (including self-employed individuals) who make contributions to their plan may qualify for the retirement savings contribution credit. File 2009 taxes The maximum contribution eligible for the credit is $2,000. File 2009 taxes To take the credit, use Form 8880, Credit for Qualified Retirement Savings Contributions. File 2009 taxes For more information on who is eligible for the credit, retirement plan contributions eligible for the credit and how to figure the credit, see Form 8880 and its instructions or go to the IRS website and search Retirement Topics-Retirement Savings Contributions Credit (Saver's Credit). File 2009 taxes Photographs of missing children. File 2009 taxes  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. File 2009 taxes Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File 2009 taxes You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. File 2009 taxes Introduction This publication discusses retirement plans you can set up and maintain for yourself and your employees. File 2009 taxes In this publication, “you” refers to the employer. File 2009 taxes See chapter 1 for the definition of the term employer and the definitions of other terms used in this publication. File 2009 taxes This publication covers the following types of retirement plans. File 2009 taxes SEP (simplified employee pension) plans. File 2009 taxes SIMPLE (savings incentive match plan for employees) plans. File 2009 taxes Qualified plans (also called H. File 2009 taxes R. File 2009 taxes 10 plans or Keogh plans when covering self-employed individuals), including 401(k) plans. File 2009 taxes SEP, SIMPLE, and qualified plans offer you and your employees a tax-favored way to save for retirement. File 2009 taxes You can deduct contributions you make to the plan for your employees. File 2009 taxes If you are a sole proprietor, you can deduct contributions you make to the plan for yourself. File 2009 taxes You can also deduct trustees' fees if contributions to the plan do not cover them. File 2009 taxes Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. File 2009 taxes Under a 401(k) plan, employees can have you contribute limited amounts of their before-tax (after-tax, in the case of a qualified Roth contribution program) pay to the plan. File 2009 taxes These amounts (and the earnings on them) are generally tax free until your employees receive distributions from the plan or, in the case of a qualified distribution from a designated Roth account, completely tax free. File 2009 taxes What this publication covers. File 2009 taxes   This publication contains the information you need to understand the following topics. File 2009 taxes What type of plan to set up. File 2009 taxes How to set up a plan. File 2009 taxes How much you can contribute to a plan. File 2009 taxes How much of your contribution is deductible. File 2009 taxes How to treat certain distributions. File 2009 taxes How to report information about the plan to the IRS and your employees. File 2009 taxes Basic features of SEP, SIMPLE, and qualified plans. File 2009 taxes The key rules for SEP, SIMPLE, and qualified plans are outlined in Table 1. File 2009 taxes SEP plans. File 2009 taxes   SEPs provide a simplified method for you to make contributions to a retirement plan for yourself and your employees. File 2009 taxes Instead of setting up a profit-sharing or money purchase plan with a trust, you can adopt a SEP agreement and make contributions directly to a traditional individual retirement account or a traditional individual retirement annuity (SEP-IRA) set up for yourself and each eligible employee. File 2009 taxes SIMPLE plans. File 2009 taxes   Generally, if you had 100 or fewer employees who received at least $5,000 in compensation last year, you can set up a SIMPLE plan. File 2009 taxes Under a SIMPLE plan, employees can choose to make salary reduction contributions rather than receiving these amounts as part of their regular pay. File 2009 taxes In addition, you will contribute matching or nonelective contributions. File 2009 taxes The two types of SIMPLE plans are the SIMPLE IRA plan and the SIMPLE 401(k) plan. File 2009 taxes Qualified plans. File 2009 taxes   The qualified plan rules are more complex than the SEP plan and SIMPLE plan rules. File 2009 taxes However, there are advantages to qualified plans, such as increased flexibility in designing plans and increased contribution and deduction limits in some cases. File 2009 taxes Table 1. File 2009 taxes Key Retirement Plan Rules for 2013 Type  of  Plan Last Date for Contribution Maximum Contribution Maximum Deduction When To Set Up Plan SEP Due date of employer's return (including extensions). File 2009 taxes Smaller of $51,000 or 25%1 of participant's compensation. File 2009 taxes 2 25%1 of all participants' compensation. File 2009 taxes 2 Any time up to the due date of employer's return (including extensions). File 2009 taxes SIMPLE IRA and SIMPLE 401(k) Salary reduction contributions: 30 days after the end of the month for which the contributions are to be made. File 2009 taxes 4  Matching or nonelective contributions: Due date of employer's return (including extensions). File 2009 taxes Employee contribution: Salary reduction contribution up to $12,000, $14,500 if age 50 or over. File 2009 taxes   Employer contribution:  Either dollar-for-dollar matching contributions, up to 3% of employee's compensation,3 or fixed nonelective contributions of 2% of compensation. File 2009 taxes 2 Same as maximum contribution. File 2009 taxes Any time between 1/1 and 10/1 of the calendar year. File 2009 taxes   For a new employer coming into existence after 10/1, as soon as administratively feasible. File 2009 taxes Qualified Plan: Defined Contribution Plan  Elective deferral: Due date of employer's return (including extensions). File 2009 taxes 4   Employer contribution: Money Purchase or Profit-Sharing: Due date of employer's return (including extensions). File 2009 taxes  Employee contribution: Elective deferral up to $17,500, $23,000 if age 50 or over. File 2009 taxes   Employer contribution: Money Purchase: Smaller of $51,000 or 100%1 of participant's compensation. File 2009 taxes 2  Profit-Sharing: Smaller of $51,000 or 100%1 of participant's compensation. File 2009 taxes 2  25%1 of all participants' compensation2, plus amount of elective deferrals made. File 2009 taxes   By the end of the tax year. File 2009 taxes Qualified Plan: Defined Benefit Plan Contributions generally must be paid in quarterly installments, due 15 days after the end of each quarter. File 2009 taxes See Minimum Funding Requirement in chapter 4. File 2009 taxes Amount needed to provide an annual benefit no larger than the smaller of $205,000 or 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. File 2009 taxes Based on actuarial assumptions and computations. File 2009 taxes By the end of the tax year. File 2009 taxes 1Net earnings from self-employment must take the contribution into account. File 2009 taxes See Deduction Limit for Self-Employed Individuals in chapters 2 and 4 . File 2009 taxes  2Compensation is generally limited to $255,000 in 2013. File 2009 taxes  3Under a SIMPLE 401(k) plan, compensation is generally limited to $255,000 in 2013. File 2009 taxes  4Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions and elective deferrals. File 2009 taxes What this publication does not cover. File 2009 taxes   Although the purpose of this publication is to provide general information about retirement plans you can set up for your employees, it does not contain all the rules and exceptions that apply to these plans. File 2009 taxes You may also need professional help and guidance. File 2009 taxes   Also, this publication does not cover all the rules that may be of interest to employees. File 2009 taxes For example, it does not cover the following topics. File 2009 taxes The comprehensive IRA rules an employee needs to know. File 2009 taxes These rules are covered in Publication 590, Individual Retirement Arrangements (IRAs). File 2009 taxes The comprehensive rules that apply to distributions from retirement plans. File 2009 taxes These rules are covered in Publication 575, Pension and Annuity Income. File 2009 taxes The comprehensive rules that apply to section 403(b) plans. File 2009 taxes These rules are covered in Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). File 2009 taxes Comments and suggestions. File 2009 taxes   We welcome your comments about this publication and your suggestions for future editions. File 2009 taxes   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File 2009 taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File 2009 taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 2009 taxes   You can send your comments from www. File 2009 taxes irs. File 2009 taxes gov/formspubs. File 2009 taxes Click on “More Information” and then on “Give us feedback. File 2009 taxes ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File 2009 taxes Ordering forms and publications. File 2009 taxes   Visit www. File 2009 taxes irs. File 2009 taxes gov/formspubs to download forms  and publications, call 1-800-TAX-FORM  (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. File 2009 taxes Internal Revenue Service 1201 N. File 2009 taxes Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File 2009 taxes   If you have a tax question, check the information available on IRS. File 2009 taxes gov or call 1-800-829-1040. File 2009 taxes We cannot answer tax questions sent to either of the above addresses. File 2009 taxes Note. File 2009 taxes Forms filed electronically with the Department of Labor are not available on the IRS website. File 2009 taxes Instead, see www. File 2009 taxes efast. File 2009 taxes dol. File 2009 taxes gov. File 2009 taxes Prev  Up  Next   Home   More Online Publications
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The File 2009 Taxes

File 2009 taxes 25. File 2009 taxes   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. File 2009 taxes Progressive deterioration. File 2009 taxes Damage from corrosive drywall. File 2009 taxes Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses What's New New Section C of Form 4684 for Ponzi-type investment schemes. File 2009 taxes  Section C of Form 4684 is new for 2013. File 2009 taxes You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. File 2009 taxes Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. File 2009 taxes You do not need to complete Appendix A. File 2009 taxes For details, see Losses from Ponzi-type investment schemes , in this chapter. File 2009 taxes Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. File 2009 taxes The chapter also explains the following  topics. File 2009 taxes How to figure the amount of your loss. File 2009 taxes How to treat insurance and other reimbursements you receive. File 2009 taxes The deduction limits. File 2009 taxes When and how to report a casualty or theft. File 2009 taxes Forms to file. File 2009 taxes    When you have a casualty or theft, you have to file Form 4684. File 2009 taxes You will also have to file one or more of the following forms. File 2009 taxes Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. File 2009 taxes   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. File 2009 taxes Workbook for casualties and thefts. File 2009 taxes    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. File 2009 taxes It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. File 2009 taxes Business or investment-related losses. File 2009 taxes   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. File 2009 taxes Useful Items - You may want to see: Publication 544 Sales and Other Dispositions  of Assets 547 Casualties, Disasters, and   Thefts 584 Casualty, Disaster, and Theft   Loss Workbook (Personal-Use  Property) Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. File 2009 taxes A sudden event is one that is swift, not gradual or progressive. File 2009 taxes An unexpected event is one that is ordinarily unanticipated and unintended. File 2009 taxes 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. File 2009 taxes Deductible losses. File 2009 taxes   Deductible casualty losses can result from a number of different causes, including the following. File 2009 taxes Car accidents (but see Nondeductible losses , next, for exceptions). File 2009 taxes Earthquakes. File 2009 taxes Fires (but see Nondeductible losses , next, for exceptions). File 2009 taxes Floods. File 2009 taxes Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses in Publication 547. File 2009 taxes Mine cave-ins. File 2009 taxes Shipwrecks. File 2009 taxes Sonic booms. File 2009 taxes Storms, including hurricanes and tornadoes. File 2009 taxes Terrorist attacks. File 2009 taxes Vandalism. File 2009 taxes Volcanic eruptions. File 2009 taxes Nondeductible losses. File 2009 taxes   A casualty loss is not deductible if the damage or destruction is caused by the following. File 2009 taxes Accidentally breaking articles such as glassware or china under normal conditions. File 2009 taxes A family pet (explained below). File 2009 taxes A fire if you willfully set it or pay someone else to set it. File 2009 taxes A car accident if your willful negligence or willful act caused it. File 2009 taxes The same is true if the willful act or willful negligence of someone acting for you caused the accident. File 2009 taxes Progressive deterioration (explained later). File 2009 taxes Family pet. File 2009 taxes   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. File 2009 taxes Example. File 2009 taxes Your antique oriental rug was damaged by your new puppy before it was housebroken. File 2009 taxes Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. File 2009 taxes Progressive deterioration. File 2009 taxes    Loss of property due to progressive deterioration is not deductible as a casualty loss. File 2009 taxes This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. File 2009 taxes The following are examples of damage due to progressive deterioration. File 2009 taxes The steady weakening of a building due to normal wind and weather conditions. File 2009 taxes The deterioration and damage to a water heater that bursts. File 2009 taxes However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. File 2009 taxes Most losses of property caused by droughts. File 2009 taxes To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. File 2009 taxes Termite or moth damage. File 2009 taxes The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. File 2009 taxes However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. File 2009 taxes Damage from corrosive drywall. File 2009 taxes   Under a special procedure, you may be able to claim a casualty loss deduction for amounts you paid to repair damage to your home and household appliances that resulted from corrosive drywall. File 2009 taxes For details, see Publication 547. File 2009 taxes Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. File 2009 taxes The taking of property must be illegal under the laws of the state where it occurred and it must have been done with criminal intent. File 2009 taxes You do not need to show a conviction for theft. File 2009 taxes Theft includes the taking of money or property by the following means. File 2009 taxes Blackmail. File 2009 taxes Burglary. File 2009 taxes Embezzlement. File 2009 taxes Extortion. File 2009 taxes Kidnapping for ransom. File 2009 taxes Larceny. File 2009 taxes Robbery. File 2009 taxes The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. File 2009 taxes Decline in market value of stock. File 2009 taxes   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. File 2009 taxes However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. File 2009 taxes You report a capital loss on Schedule D (Form 1040). File 2009 taxes For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. File 2009 taxes Mislaid or lost property. File 2009 taxes   The simple disappearance of money or property is not a theft. File 2009 taxes However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. File 2009 taxes Sudden, unexpected, and unusual events are defined earlier. File 2009 taxes Example. File 2009 taxes A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. File 2009 taxes The diamond falls from the ring and is never found. File 2009 taxes The loss of the diamond is a casualty. File 2009 taxes Losses from Ponzi-type investment schemes. File 2009 taxes   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. File 2009 taxes R. File 2009 taxes B. File 2009 taxes 735 (available at www. File 2009 taxes irs. File 2009 taxes gov/irb/2009-14_IRB/ar07. File 2009 taxes html). File 2009 taxes Revenue Procedure 2009-20, 2009-14 I. File 2009 taxes R. File 2009 taxes B. File 2009 taxes 749 (available at www. File 2009 taxes irs. File 2009 taxes gov/irb/2009-14_IRB/ar11. File 2009 taxes html). File 2009 taxes Revenue Procedure 2011-58, 2011-50 I. File 2009 taxes R. File 2009 taxes B. File 2009 taxes 849 (available at www. File 2009 taxes irs. File 2009 taxes gov/irb/2011-50_IRB/ar11. File 2009 taxes html). File 2009 taxes If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. File 2009 taxes Skip lines 19 to 27. File 2009 taxes Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. File 2009 taxes You do not need to complete Appendix A. File 2009 taxes For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. File 2009 taxes   If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. File 2009 taxes Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. File 2009 taxes If you incurred this type of loss, you can choose one of the following ways to deduct the loss. File 2009 taxes As a casualty loss. File 2009 taxes As an ordinary loss. File 2009 taxes As a nonbusiness bad debt. File 2009 taxes Casualty loss or ordinary loss. File 2009 taxes   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. File 2009 taxes The choice is generally made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. File 2009 taxes If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. File 2009 taxes However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. File 2009 taxes Once you make this choice, you cannot change it without permission from the Internal Revenue Service. File 2009 taxes   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. File 2009 taxes The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. File 2009 taxes Your loss is subject to the 2%-of-adjusted-gross-income limit. File 2009 taxes You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. File 2009 taxes Nonbusiness bad debt. File 2009 taxes   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. File 2009 taxes How to report. File 2009 taxes   The kind of deduction you choose for your loss on deposits determines how you report your loss. File 2009 taxes If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). File 2009 taxes Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. File 2009 taxes Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). File 2009 taxes More information. File 2009 taxes   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684 or Deposit in Insolvent or Bankrupt Financial Institution in Publication 550. File 2009 taxes Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. File 2009 taxes You also must be able to support the amount you take as a deduction. File 2009 taxes Casualty loss proof. File 2009 taxes   For a casualty loss, your records should show all the following. File 2009 taxes The type of casualty (car accident, fire, storm, etc. File 2009 taxes ) and when it occurred. File 2009 taxes That the loss was a direct result of the casualty. File 2009 taxes That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. File 2009 taxes Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File 2009 taxes Theft loss proof. File 2009 taxes   For a theft loss, your records should show all the following. File 2009 taxes When you discovered that your property was missing. File 2009 taxes That your property was stolen. File 2009 taxes That you were the owner of the property. File 2009 taxes Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File 2009 taxes It is important that you have records that will prove your deduction. File 2009 taxes If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. File 2009 taxes Figuring a Loss Figure the amount of your loss using the following steps. File 2009 taxes Determine your adjusted basis in the property before the casualty or theft. File 2009 taxes Determine the decrease in fair market value of the property as a result of the casualty or theft. File 2009 taxes From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. File 2009 taxes For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. File 2009 taxes Gain from reimbursement. File 2009 taxes   If your reimbursement is more than your adjusted basis in the property, you have a gain. File 2009 taxes This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. File 2009 taxes If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. File 2009 taxes See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. File 2009 taxes Leased property. File 2009 taxes   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. File 2009 taxes Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. File 2009 taxes The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. File 2009 taxes FMV of stolen property. File 2009 taxes   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. File 2009 taxes Example. File 2009 taxes Several years ago, you purchased silver dollars at face value for $150. File 2009 taxes This is your adjusted basis in the property. File 2009 taxes Your silver dollars were stolen this year. File 2009 taxes The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. File 2009 taxes Your theft loss is $150. File 2009 taxes Recovered stolen property. File 2009 taxes   Recovered stolen property is your property that was stolen and later returned to you. File 2009 taxes If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. File 2009 taxes Use this amount to refigure your total loss for the year in which the loss was deducted. File 2009 taxes   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. File 2009 taxes But report the difference only up to the amount of the loss that reduced your tax. File 2009 taxes For more information on the amount to report, see Recoveries in chapter 12. File 2009 taxes Figuring Decrease in FMV— Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. File 2009 taxes However, other measures can also be used to establish certain decreases. File 2009 taxes Appraisal. File 2009 taxes   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. File 2009 taxes The appraiser must recognize the effects of any general market decline that may occur along with the casualty. File 2009 taxes This information is needed to limit any deduction to the actual loss resulting from damage to the property. File 2009 taxes   Several factors are important in evaluating the accuracy of an appraisal, including the following. File 2009 taxes The appraiser's familiarity with your property before and after the casualty or theft. File 2009 taxes The appraiser's knowledge of sales of comparable property in the area. File 2009 taxes The appraiser's knowledge of conditions in the area of the casualty. File 2009 taxes The appraiser's method of appraisal. File 2009 taxes    You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. File 2009 taxes For more information on disasters, see Disaster Area Losses, in Pub. File 2009 taxes 547. File 2009 taxes Cost of cleaning up or making repairs. File 2009 taxes   The cost of repairing damaged property is not part of a casualty loss. File 2009 taxes Neither is the cost of cleaning up after a casualty. File 2009 taxes But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. File 2009 taxes The repairs are actually made. File 2009 taxes The repairs are necessary to bring the property back to its condition before the casualty. File 2009 taxes The amount spent for repairs is not excessive. File 2009 taxes The repairs take care of the damage only. File 2009 taxes The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. File 2009 taxes Landscaping. File 2009 taxes   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. File 2009 taxes You may be able to measure your loss by what you spend on the following. File 2009 taxes Removing destroyed or damaged trees and shrubs minus any salvage you receive. File 2009 taxes Pruning and other measures taken to preserve damaged trees and shrubs. File 2009 taxes Replanting necessary to restore the property to its approximate value before the casualty. File 2009 taxes Car value. File 2009 taxes    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. File 2009 taxes You can use the book's retail values and modify them by such factors as mileage and the condition of your car to figure its value. File 2009 taxes The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. File 2009 taxes If your car is not listed in the books, determine its value from other sources. File 2009 taxes A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. File 2009 taxes Figuring Decrease in FMV— Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. File 2009 taxes Cost of protection. File 2009 taxes   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. File 2009 taxes The amount you spend on insurance or to board up your house against a storm is not part of your loss. File 2009 taxes   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. File 2009 taxes An example would be the cost of a dike to prevent flooding. File 2009 taxes Exception. File 2009 taxes   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments. File 2009 taxes See Disaster Area Losses in Publication 547. File 2009 taxes Incidental expenses. File 2009 taxes   Any incidental expenses you have due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. File 2009 taxes Replacement cost. File 2009 taxes   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. File 2009 taxes Sentimental value. File 2009 taxes   Do not consider sentimental value when determining your loss. File 2009 taxes If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. File 2009 taxes Decline in market value of property in or near casualty area. File 2009 taxes   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. File 2009 taxes You have a loss only for actual casualty damage to your property. File 2009 taxes However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. File 2009 taxes Costs of photographs and appraisals. File 2009 taxes    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. File 2009 taxes Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. File 2009 taxes    Appraisals are used to figure the decrease in FMV because of a casualty or theft. File 2009 taxes See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. File 2009 taxes   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. File 2009 taxes You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). File 2009 taxes For information about miscellaneous deductions, see chapter 28. File 2009 taxes Adjusted Basis Adjusted basis is your basis in the property (usually cost) increased or decreased by various events, such as improvements and casualty losses. File 2009 taxes For more information, see chapter 13. File 2009 taxes Insurance and Other Reimbursements If you receive an insurance payment or other type of reimbursement, you must subtract the reimbursement when you figure your loss. File 2009 taxes You do not have a casualty or theft loss to the extent you are reimbursed. File 2009 taxes If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. File 2009 taxes You must reduce your loss even if you do not receive payment until a later tax year. File 2009 taxes See Reimbursement Received After Deducting Loss , later. File 2009 taxes Failure to file a claim for reimbursement. File 2009 taxes   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. File 2009 taxes Otherwise, you cannot deduct this loss as a casualty or theft loss. File 2009 taxes However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). File 2009 taxes Example. File 2009 taxes You have a car insurance policy with a $1,000 deductible. File 2009 taxes Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the deduction limits discussed later). File 2009 taxes This is true even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. File 2009 taxes Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. File 2009 taxes Other types of reimbursements are discussed next. File 2009 taxes Also see the Instructions for Form 4684. File 2009 taxes Employer's emergency disaster fund. File 2009 taxes   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. File 2009 taxes Take into consideration only the amount you used to replace your destroyed or damaged property. File 2009 taxes Example. File 2009 taxes Your home was extensively damaged by a tornado. File 2009 taxes Your loss after reimbursement from your insurance company was $10,000. File 2009 taxes Your employer set up a disaster relief fund for its employees. File 2009 taxes Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. File 2009 taxes You received $4,000 from the fund and spent the entire amount on repairs to your home. File 2009 taxes In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. File 2009 taxes Your casualty loss before applying the deduction limits discussed later is $6,000. File 2009 taxes Cash gifts. File 2009 taxes   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. File 2009 taxes This applies even if you use the money to pay for repairs to property damaged in the disaster. File 2009 taxes Example. File 2009 taxes Your home was damaged by a hurricane. File 2009 taxes Relatives and neighbors made cash gifts to you that were excludable from your income. File 2009 taxes You used part of the cash gifts to pay for repairs to your home. File 2009 taxes There were no limits or restrictions on how you could use the cash gifts. File 2009 taxes Because it was an excludable gift, the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. File 2009 taxes Insurance payments for living expenses. File 2009 taxes   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. File 2009 taxes You lose the use of your main home because of a casualty. File 2009 taxes Government authorities do not allow you access to your main home because of a casualty or threat of one. File 2009 taxes Inclusion in income. File 2009 taxes   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. File 2009 taxes Report this amount on Form 1040, line 21. File 2009 taxes However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. File 2009 taxes See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. File 2009 taxes   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. File 2009 taxes Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. File 2009 taxes Generally, these expenses include the amounts you pay for the following. File 2009 taxes Rent for suitable housing. File 2009 taxes Transportation. File 2009 taxes Food. File 2009 taxes Utilities. File 2009 taxes Miscellaneous services. File 2009 taxes Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. File 2009 taxes Example. File 2009 taxes As a result of a fire, you vacated your apartment for a month and moved to a motel. File 2009 taxes You normally pay $525 a month for rent. File 2009 taxes None was charged for the month the apartment was vacated. File 2009 taxes Your motel rent for this month was $1,200. File 2009 taxes You normally pay $200 a month for food. File 2009 taxes Your food expenses for the month you lived in the motel were $400. File 2009 taxes You received $1,100 from your insurance company to cover your living expenses. File 2009 taxes You determine the payment you must include in income as follows. File 2009 taxes 1) Insurance payment for living expenses $1,100 2) Actual expenses during the month you are unable to use your home because of fire 1,600   3) Normal living expenses 725   4) Temporary increase in living  expenses: Subtract line 3 from line 2 875 5) Amount of payment includible  in income: Subtract line 4  from line 1 $ 225 Tax year of inclusion. File 2009 taxes   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. File 2009 taxes Example. File 2009 taxes Your main home was destroyed by a tornado in August 2011. File 2009 taxes You regained use of your home in November 2012. File 2009 taxes The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. File 2009 taxes You include this amount in income on your 2012 Form 1040. File 2009 taxes If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. File 2009 taxes Disaster relief. File 2009 taxes   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss unless they are replacements for lost or destroyed property. File 2009 taxes Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster are not taxable income to you. File 2009 taxes For more information, see Disaster Area Losses in Publication 547. File 2009 taxes Disaster unemployment assistance payments are unemployment benefits that are taxable. File 2009 taxes Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. File 2009 taxes Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not includible in your income. File 2009 taxes See Disaster Area Losses in Publication 547. File 2009 taxes Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you receive your actual reimbursement. File 2009 taxes This section explains the adjustment you may have to make. File 2009 taxes Actual reimbursement less than expected. File 2009 taxes   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. File 2009 taxes Example. File 2009 taxes Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. File 2009 taxes The accident was due to the negligence of the other driver. File 2009 taxes At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. File 2009 taxes You did not have a deductible loss in 2012. File 2009 taxes In January 2013, the court awarded you a judgment of $2,000. File 2009 taxes However, in July it became apparent that you will be unable to collect any amount from the other driver. File 2009 taxes You can deduct the loss in 2013 subject to the limits discussed later. File 2009 taxes Actual reimbursement more than expected. File 2009 taxes   If you later receive more reimbursement than you expected after you claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. File 2009 taxes However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. File 2009 taxes You do not refigure your tax for the year you claimed the deduction. File 2009 taxes For more information, see Recoveries in chapter 12. File 2009 taxes If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. File 2009 taxes If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. File 2009 taxes Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. File 2009 taxes See Figuring a Gain in Publication 547 for more information on how to treat a gain from the reimbursement of a casualty or theft. File 2009 taxes Actual reimbursement same as expected. File 2009 taxes   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. File 2009 taxes Example. File 2009 taxes In December 2013, you had a collision while driving your personal car. File 2009 taxes Repairs to the car cost $950. File 2009 taxes You had $100 deductible collision insurance. File 2009 taxes Your insurance company agreed to reimburse you for the rest of the damage. File 2009 taxes Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. File 2009 taxes Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. File 2009 taxes When you receive the $850 from the insurance company in 2014, do not report it as income. File 2009 taxes Single Casualty on Multiple Properties Personal property. File 2009 taxes   Personal property is any property that is not real property. File 2009 taxes If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. File 2009 taxes Then combine these separate losses to figure the total loss from that casualty or theft. File 2009 taxes Example. File 2009 taxes A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. File 2009 taxes You did not have fire insurance to cover your loss. File 2009 taxes (This was the only casualty or theft you had during the year. File 2009 taxes ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. File 2009 taxes The rug cost $3,000 and had an FMV of $2,500 just before the fire. File 2009 taxes You bought the table at an auction for $100 before discovering it was an antique. File 2009 taxes It had been appraised at $900 before the fire. File 2009 taxes You figure your loss on each of these items as follows:     Chair Rug Table 1) Basis (cost) $750 $3,000 $100 2) FMV before fire $500 $2,500 $900 3) FMV after fire –0– –0– –0– 4) Decrease in FMV $500 $2,500 $900 5) Loss (smaller of (1) or  (4)) $500 $2,500 $100           6) Total loss     $3,100 Real property. File 2009 taxes   In figuring a casualty loss on personal-use real property, treat the entire property (including any improvements, such as buildings, trees, and shrubs) as one item. File 2009 taxes Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. File 2009 taxes Example. File 2009 taxes You bought your home a few years ago. File 2009 taxes You paid $160,000 ($20,000 for the land and $140,000 for the house). File 2009 taxes You also spent $2,000 for landscaping. File 2009 taxes This year a fire destroyed your home. File 2009 taxes The fire also damaged the shrubbery and trees in your yard. File 2009 taxes The fire was your only casualty or theft loss this year. File 2009 taxes Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. File 2009 taxes (The loss to your household furnishings is not shown in this example. File 2009 taxes It would be figured separately on each item, as explained earlier under Personal property . File 2009 taxes ) Shortly after the fire, the insurance company paid you $155,000 for the loss. File 2009 taxes You figure your casualty loss as follows: 1) Adjusted basis of the entire property (land, building, and landscaping) $162,000 2) FMV of entire property before fire $200,000 3) FMV of entire property after fire 30,000 4) Decrease in FMV of entire  property $170,000 5) Loss (smaller of (1) or (4)) $162,000 6) Subtract insurance 155,000 7) Amount of loss after reimbursement $7,000 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. File 2009 taxes If the loss was to property for your personal use or your family's use, there are two limits on the amount you can deduct for your casualty or theft loss. File 2009 taxes You must reduce each casualty or theft loss by $100 ($100 rule). File 2009 taxes You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). File 2009 taxes You make these reductions on Form 4684. File 2009 taxes These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. File 2009 taxes For more detailed explanations and examples, see Publication 547. File 2009 taxes Table 25-1. File 2009 taxes How To Apply the Deduction Limits for Personal-Use Property   $100 Rule 10% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. File 2009 taxes Apply this rule after you have figured the amount of your loss. File 2009 taxes You must reduce your total casualty or theft loss by 10% of your adjusted gross income. File 2009 taxes Apply this rule after you reduce each loss by $100 (the $100 rule). File 2009 taxes Single Event Apply this rule only once, even if many pieces of property are affected. File 2009 taxes Apply this rule only once, even if many pieces of property are affected. File 2009 taxes More Than One Event Apply to the loss from each event. File 2009 taxes Apply to the total of all your losses from all events. File 2009 taxes More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. File 2009 taxes Apply separately to each person. File 2009 taxes Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. File 2009 taxes Apply as if you were one person. File 2009 taxes Filing Separately Apply separately to each spouse. File 2009 taxes Apply separately to each spouse. File 2009 taxes More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. File 2009 taxes Apply separately to each owner of jointly owned property. File 2009 taxes Property used partly for business and partly for personal purposes. File 2009 taxes   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use part and for the business or income-producing part. File 2009 taxes You must figure each loss separately because the $100 rule and the 10% rule apply only to the loss on the personal-use part of the property. File 2009 taxes $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. File 2009 taxes This reduction applies to each total casualty or theft loss. File 2009 taxes It does not matter how many pieces of property are involved in an event. File 2009 taxes Only a single $100 reduction applies. File 2009 taxes Example. File 2009 taxes A hailstorm damages your home and your car. File 2009 taxes Determine the amount of loss, as discussed earlier, for each of these items. File 2009 taxes Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. File 2009 taxes Single event. File 2009 taxes   Generally, events closely related in origin cause a single casualty. File 2009 taxes It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. File 2009 taxes 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. File 2009 taxes Apply this rule after you reduce each loss by $100. File 2009 taxes For more information, see the Form 4684 instructions. File 2009 taxes If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. File 2009 taxes Example 1. File 2009 taxes In June, you discovered that your house had been burglarized. File 2009 taxes Your loss after insurance reimbursement was $2,000. File 2009 taxes Your adjusted gross income for the year you discovered the theft is $29,500. File 2009 taxes You first apply the $100 rule and then the 10% rule. File 2009 taxes Figure your theft loss deduction as follows. File 2009 taxes 1) Loss after insurance $2,000 2) Subtract $100 100 3) Loss after $100 rule $1,900 4) Subtract 10% × $29,500 AGI 2,950 5) Theft loss deduction –0– You do not have a theft loss deduction because your loss after you apply the $100 rule ($1,900) is less than 10% of your adjusted gross income ($2,950). File 2009 taxes Example 2. File 2009 taxes In March, you had a car accident that totally destroyed your car. File 2009 taxes You did not have collision insurance on your car, so you did not receive any insurance reimbursement. File 2009 taxes Your loss on the car was $1,800. File 2009 taxes In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. File 2009 taxes Your loss on the basement items after reimbursement was $2,100. File 2009 taxes Your adjusted gross income for the year that the accident and fire occurred is $25,000. File 2009 taxes You figure your casualty loss deduction as follows. File 2009 taxes       Base-     Car ment 1) Loss $1,800 $2,100 2) Subtract $100 per incident 100 100 3) Loss after $100 rule $1,700 $2,000 4) Total loss $3,700 5) Subtract 10% × $25,000 AGI 2,500 6) Casualty loss deduction $1,200 Gains and losses. File 2009 taxes   If you had both gains and losses from casualties or thefts to personal-use property, you must compare your total gains to your total losses. File 2009 taxes Do this after you have reduced each loss by any reimbursements and by $100, but before you have reduced the losses by 10% of your adjusted gross income. File 2009 taxes Casualty or theft gains do not include gains you choose to postpone. File 2009 taxes See Publication 547 for information on the postponement of gain. File 2009 taxes Losses more than gains. File 2009 taxes   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. File 2009 taxes The rest, if any, is your deductible loss from personal-use property. File 2009 taxes Gains more than losses. File 2009 taxes   If your recognized gains are more than your losses, subtract your losses from your gains. File 2009 taxes The difference is treated as capital gain and must be reported on Schedule D (Form 1040). File 2009 taxes The 10% rule does not apply to your gains. File 2009 taxes When To Report Gains and Losses Gains. File 2009 taxes   If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. File 2009 taxes You must include this gain in your income in the year you receive the reimbursement, unless you choose to postpone reporting the gain as explained in Publication 547. File 2009 taxes If you have a loss, see Table 25-2 . File 2009 taxes Table 25-2. File 2009 taxes When To Deduct a Loss IF you have a loss. File 2009 taxes . File 2009 taxes . File 2009 taxes THEN deduct it in the year. File 2009 taxes . File 2009 taxes . File 2009 taxes from a casualty, the loss occurred. File 2009 taxes in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. File 2009 taxes from a theft, the theft was discovered. File 2009 taxes on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. File 2009 taxes • bad debt, deposits are totally worthless. File 2009 taxes Losses. File 2009 taxes   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. File 2009 taxes This is true even if you do not repair or replace the damaged property until a later year. File 2009 taxes   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. File 2009 taxes   If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. File 2009 taxes Loss on deposits. File 2009 taxes   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. File 2009 taxes Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. File 2009 taxes However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct the loss on your tax return or amended return for either of the following years. File 2009 taxes The year the disaster occurred. File 2009 taxes The year immediately preceding the year the disaster occurred. File 2009 taxes Gains. File 2009 taxes    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. File 2009 taxes For those special rules, see Publication 547. File 2009 taxes Postponed tax deadlines. File 2009 taxes   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. File 2009 taxes The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. File 2009 taxes   If any tax deadline is postponed, the IRS will publicize the postponement in your area by publishing a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). File 2009 taxes Go to www. File 2009 taxes irs. File 2009 taxes gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. File 2009 taxes Who is eligible. File 2009 taxes   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. File 2009 taxes Any individual whose main home is located in a covered disaster area (defined next). File 2009 taxes Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. File 2009 taxes Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. File 2009 taxes Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. File 2009 taxes The main home or principal place of business does not have to be located in the covered disaster area. File 2009 taxes Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. File 2009 taxes The spouse on a joint return with a taxpayer who is eligible for postponements. File 2009 taxes Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a postponed tax deadline are located in the covered disaster area. File 2009 taxes Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. File 2009 taxes Any other person determined by the IRS to be affected by a federally declared disaster. File 2009 taxes Covered disaster area. File 2009 taxes   This is an area of a federally declared disaster in which the IRS has decided to postpone tax deadlines for up to 1 year. File 2009 taxes Abatement of interest and penalties. File 2009 taxes   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. File 2009 taxes More information. File 2009 taxes   For more information, see Disaster Area Losses in Publication 547. File 2009 taxes How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. File 2009 taxes If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. File 2009 taxes Combine the gains and losses on one Form 4684. File 2009 taxes Follow the form instructions as to which lines to fill out. File 2009 taxes In addition, you must use the appropriate schedule to report a gain or loss. File 2009 taxes The schedule you use depends on whether you have a gain or loss. File 2009 taxes If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. File 2009 taxes   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive, and by any deductible loss. File 2009 taxes Amounts you spend to restore your property after a casualty increase your adjusted basis. File 2009 taxes See Adjusted Basis in chapter 13 for more information. File 2009 taxes Net operating loss (NOL). File 2009 taxes    If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have an NOL. File 2009 taxes You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you have already paid. File 2009 taxes Or, you can use it to lower your tax in a later year. File 2009 taxes You do not have to be in business to have an NOL from a casualty or theft loss. File 2009 taxes For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. File 2009 taxes Prev  Up  Next   Home   More Online Publications