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File taxes online Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. File taxes online irs. File taxes online gov/pub80. File taxes online What's New Social security and Medicare tax for 2014. File taxes online  The social security tax rate is 6. File taxes online 2% each for the employee and employer, unchanged from 2013. File taxes online The social security wage base limit is $117,000. File taxes online The Medicare tax rate is 1. File taxes online 45% each for the employee and employer, unchanged from 2013. File taxes online There is no wage base limit for Medicare tax. File taxes online Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. File taxes online Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. File taxes online Change of responsible party. File taxes online . File taxes online  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. File taxes online Form 8822-B must be filed within 60 days of the change. File taxes online If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. File taxes online For a definition of “responsible party”, see the Form 8822-B instructions. File taxes online Same-sex marriage. File taxes online  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. File taxes online For more information, see Revenue Ruling 2013-17, 2013-38 I. File taxes online R. File taxes online B. File taxes online 201, available at www. File taxes online irs. File taxes online gov/irb/2013-38_IRB/ar07. File taxes online html. File taxes online Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. File taxes online Notice 2013-61, 2013-44 I. File taxes online R. File taxes online B. File taxes online 432, is available at www. File taxes online irs. File taxes online gov/irb/2013-44_IRB/ar10. File taxes online html. File taxes online Reminders Additional Medicare Tax withholding. File taxes online  In addition to withholding Medicare tax at 1. File taxes online 45%, you must withhold a 0. File taxes online 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. File taxes online You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. File taxes online Additional Medicare Tax is only imposed on the employee. File taxes online There is no employer share of Additional Medicare Tax. File taxes online All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. File taxes online For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. File taxes online For more information on Additional Medicare Tax, visit IRS. File taxes online gov and enter “Additional Medicare Tax” in the search box. File taxes online Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. File taxes online  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. File taxes online Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. File taxes online For more information, visit IRS. File taxes online gov and enter “work opportunity tax credit” in the search box. File taxes online Outsourcing payroll duties. File taxes online  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. File taxes online The employer remains responsible if the third party fails to perform any required action. File taxes online If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. File taxes online gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. File taxes online Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). File taxes online  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). File taxes online For more information, see Announcement 2012-43, 2012-51 I. File taxes online R. File taxes online B. File taxes online 723, available at www. File taxes online irs. File taxes online gov/irb/2012-51_IRB/ar15. File taxes online html. File taxes online CNMI government employees now subject to social security and Medicare taxes. File taxes online  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. File taxes online COBRA premium assistance credit. File taxes online  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. File taxes online See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. File taxes online You can get Publication 15 (Circular E) at IRS. File taxes online gov. File taxes online You must receive written notice from the IRS to file Form 944. File taxes online  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. File taxes online You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. File taxes online For more information on requesting to file Form 944 visit IRS. File taxes online gov and enter “file employment taxes annually” in the search box. File taxes online Federal employers in the CNMI. File taxes online  The U. File taxes online S. File taxes online Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. File taxes online Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. File taxes online Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. File taxes online For questions, contact the CNMI Division of Revenue and Taxation. File taxes online Change of address. File taxes online  Use Form 8822-B to notify the IRS of an address change. File taxes online Do not mail Form 8822-B with your employment tax return. File taxes online Federal tax deposits must be made by electronic funds transfer. File taxes online  You must use electronic funds transfer to make all federal tax deposits. File taxes online Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). File taxes online If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. File taxes online Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. File taxes online EFTPS is a free service provided by the Department of Treasury. File taxes online Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. File taxes online For more information on making federal tax deposits, see How To Deposit in section 8. File taxes online For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. File taxes online eftps. File taxes online gov or call 1-800-555-4477 (U. File taxes online S. File taxes online Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). File taxes online Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. File taxes online Electronic filing and payment. File taxes online  Using electronic options can make filing a return and paying your federal tax easier. File taxes online Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. File taxes online You can use IRS e-file to file certain returns. File taxes online If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. File taxes online Do not use EFW to pay taxes that are required to be deposited. File taxes online Visit the IRS website at www. File taxes online irs. File taxes online gov/efile for more information on filing electronically. File taxes online For more information on paying your taxes using EFW, visit the IRS website at www. File taxes online irs. File taxes online gov/e-pay. File taxes online A fee may be charged to file electronically. File taxes online For EFTPS, visit www. File taxes online eftps. File taxes online gov or call EFTPS Customer Service at 1-800-555-4477 (U. File taxes online S. File taxes online Virgin Islands only) or 303-967-5916 (toll call). File taxes online For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. File taxes online socialsecurity. File taxes online gov/employer. File taxes online If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. File taxes online If a valid EIN is not provided, the return or payment will not be processed. File taxes online This may result in penalties and delays in processing your return or payment. File taxes online Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. File taxes online  Employers in American Samoa, the CNMI, Guam, and the U. File taxes online S. File taxes online Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. File taxes online Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. File taxes online For more information, visit Social Security Administration's SSA website at www. File taxes online ssa. File taxes online gov/bso/bsowelcome. File taxes online htm. File taxes online Credit or debit card payments. File taxes online  For information on paying your taxes with a credit or debit card, visit the IRS website at www. File taxes online irs. File taxes online gov/e-pay. File taxes online However, do not use credit or debit cards to make federal tax deposits. File taxes online Hiring new employees. File taxes online  Record the number and name from each new employee's social security card. File taxes online An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. File taxes online See section 3. File taxes online Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. File taxes online  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. File taxes online For more information, see the Instructions for Schedule D (Form 941). File taxes online Apply for an employer identification number (EIN) online. File taxes online  You can apply for an EIN online by visiting IRS. File taxes online gov and clicking on the Apply for an EIN Online link under Tools. File taxes online Dishonored payments. File taxes online  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. File taxes online The penalty is $25 or 2% of the payment, whichever is more. File taxes online However, the penalty on dishonored payments of $24. File taxes online 99 or less is an amount equal to the payment. File taxes online For example, a dishonored payment of $18 is charged a penalty of $18. File taxes online Private delivery services. File taxes online  You can use certain private delivery services designated by the IRS to send tax returns or payments. File taxes online The list includes only the following: DHL Express (DHL): DHL Same Day Service. File taxes online Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. File taxes online United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. File taxes online M. File taxes online , UPS Worldwide Express Plus, and UPS Worldwide Express. File taxes online For the IRS mailing address to use if you are using a private delivery service, go to IRS. File taxes online gov and enter “private delivery service” in the search box. File taxes online Your private delivery service can tell you how to get written proof of the mailing date. File taxes online Private delivery services cannot deliver items to P. File taxes online O. File taxes online boxes. File taxes online You must use the U. File taxes online S. File taxes online Postal Service to mail any item to an IRS P. File taxes online O. File taxes online box address. File taxes online Recordkeeping. File taxes online  Keep all records of employment taxes for 4 years. File taxes online These should be available for IRS review. File taxes online There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. File taxes online Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. File taxes online See Farm Crew Leaders in section 2. File taxes online Disregarded entities and qualified subchapter S subsidiaries (QSubs). File taxes online  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. File taxes online Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. File taxes online See Regulations sections 1. File taxes online 1361-4(a)(7) and 301. File taxes online 7701-2(c)(2)(iv). File taxes online Photographs of missing children. File taxes online  The IRS is a proud partner with the National Center for Missing and Exploited Children. File taxes online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File taxes online 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 taxes online Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. File taxes online A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. File taxes online However, a statewide legal holiday does not delay the due date of federal tax deposits. File taxes online See Deposits on Business Days Only in section 8. File taxes online For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. File taxes online S. File taxes online Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. File taxes online See Private delivery services under Reminders. File taxes online The following are important dates and responsibilities. File taxes online Also see Publication 509, Tax Calendars. File taxes online By January 31. File taxes online   Furnish wage and tax statements to employees. File taxes online Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. File taxes online See section 10 for more information. File taxes online File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. File taxes online If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. File taxes online U. File taxes online S. File taxes online Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. File taxes online Pay or deposit (if more than $500) any balance of the tax due. File taxes online If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. File taxes online File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. File taxes online If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. File taxes online By February 28. File taxes online  File paper wage and tax statements with the Social Security Administration (SSA). File taxes online File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). File taxes online For electronically filed returns, see By March 31 next. File taxes online By March 31. File taxes online  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. File taxes online Visit the SSA's Reporting Instructions & Information webpage at www. File taxes online socialsecurity. File taxes online gov/employer for more information. File taxes online By April 30, July 31, October 31, and January 31. File taxes online  File Form 941-SS with the IRS. File taxes online If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. File taxes online Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. File taxes online Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. File taxes online If $500 or less, carry it over to the next quarter. File taxes online See section 11 for more information. File taxes online Prev  Up  Next   Home   More Online Publications
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File taxes online 25. File taxes online   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. File taxes online Progressive deterioration. File taxes online Damage from corrosive drywall. File taxes online 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 taxes online  Section C of Form 4684 is new for 2013. File taxes online 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 taxes online Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. File taxes online You do not need to complete Appendix A. File taxes online For details, see Losses from Ponzi-type investment schemes , in this chapter. File taxes online Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. File taxes online The chapter also explains the following  topics. File taxes online How to figure the amount of your loss. File taxes online How to treat insurance and other reimbursements you receive. File taxes online The deduction limits. File taxes online When and how to report a casualty or theft. File taxes online Forms to file. File taxes online    When you have a casualty or theft, you have to file Form 4684. File taxes online You will also have to file one or more of the following forms. File taxes online Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. File taxes online   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. File taxes online Workbook for casualties and thefts. File taxes online    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. File taxes online It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. File taxes online Business or investment-related losses. File taxes online   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. File taxes online 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 taxes online A sudden event is one that is swift, not gradual or progressive. File taxes online An unexpected event is one that is ordinarily unanticipated and unintended. File taxes online 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 taxes online Deductible losses. File taxes online   Deductible casualty losses can result from a number of different causes, including the following. File taxes online Car accidents (but see Nondeductible losses , next, for exceptions). File taxes online Earthquakes. File taxes online Fires (but see Nondeductible losses , next, for exceptions). File taxes online Floods. File taxes online 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 taxes online Mine cave-ins. File taxes online Shipwrecks. File taxes online Sonic booms. File taxes online Storms, including hurricanes and tornadoes. File taxes online Terrorist attacks. File taxes online Vandalism. File taxes online Volcanic eruptions. File taxes online Nondeductible losses. File taxes online   A casualty loss is not deductible if the damage or destruction is caused by the following. File taxes online Accidentally breaking articles such as glassware or china under normal conditions. File taxes online A family pet (explained below). File taxes online A fire if you willfully set it or pay someone else to set it. File taxes online A car accident if your willful negligence or willful act caused it. File taxes online The same is true if the willful act or willful negligence of someone acting for you caused the accident. File taxes online Progressive deterioration (explained later). File taxes online Family pet. File taxes online   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 taxes online Example. File taxes online Your antique oriental rug was damaged by your new puppy before it was housebroken. File taxes online Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. File taxes online Progressive deterioration. File taxes online    Loss of property due to progressive deterioration is not deductible as a casualty loss. File taxes online This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. File taxes online The following are examples of damage due to progressive deterioration. File taxes online The steady weakening of a building due to normal wind and weather conditions. File taxes online The deterioration and damage to a water heater that bursts. File taxes online However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. File taxes online Most losses of property caused by droughts. File taxes online 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 taxes online Termite or moth damage. File taxes online The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. File taxes online However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. File taxes online Damage from corrosive drywall. File taxes online   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 taxes online For details, see Publication 547. File taxes online Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. File taxes online 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 taxes online You do not need to show a conviction for theft. File taxes online Theft includes the taking of money or property by the following means. File taxes online Blackmail. File taxes online Burglary. File taxes online Embezzlement. File taxes online Extortion. File taxes online Kidnapping for ransom. File taxes online Larceny. File taxes online Robbery. File taxes online The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. File taxes online Decline in market value of stock. File taxes online   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 taxes online 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 taxes online You report a capital loss on Schedule D (Form 1040). File taxes online For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. File taxes online Mislaid or lost property. File taxes online   The simple disappearance of money or property is not a theft. File taxes online 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 taxes online Sudden, unexpected, and unusual events are defined earlier. File taxes online Example. File taxes online A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. File taxes online The diamond falls from the ring and is never found. File taxes online The loss of the diamond is a casualty. File taxes online Losses from Ponzi-type investment schemes. File taxes online   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. File taxes online R. File taxes online B. File taxes online 735 (available at www. File taxes online irs. File taxes online gov/irb/2009-14_IRB/ar07. File taxes online html). File taxes online Revenue Procedure 2009-20, 2009-14 I. File taxes online R. File taxes online B. File taxes online 749 (available at www. File taxes online irs. File taxes online gov/irb/2009-14_IRB/ar11. File taxes online html). File taxes online Revenue Procedure 2011-58, 2011-50 I. File taxes online R. File taxes online B. File taxes online 849 (available at www. File taxes online irs. File taxes online gov/irb/2011-50_IRB/ar11. File taxes online html). File taxes online 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 taxes online Skip lines 19 to 27. File taxes online Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. File taxes online You do not need to complete Appendix A. File taxes online For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. File taxes online   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 taxes online Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. File taxes online If you incurred this type of loss, you can choose one of the following ways to deduct the loss. File taxes online As a casualty loss. File taxes online As an ordinary loss. File taxes online As a nonbusiness bad debt. File taxes online Casualty loss or ordinary loss. File taxes online   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 taxes online 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 taxes online 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 taxes online 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 taxes online Once you make this choice, you cannot change it without permission from the Internal Revenue Service. File taxes online   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. File taxes online 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 taxes online Your loss is subject to the 2%-of-adjusted-gross-income limit. File taxes online You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. File taxes online Nonbusiness bad debt. File taxes online   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 taxes online How to report. File taxes online   The kind of deduction you choose for your loss on deposits determines how you report your loss. File taxes online If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). File taxes online Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. File taxes online Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). File taxes online More information. File taxes online   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 taxes online Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. File taxes online You also must be able to support the amount you take as a deduction. File taxes online Casualty loss proof. File taxes online   For a casualty loss, your records should show all the following. File taxes online The type of casualty (car accident, fire, storm, etc. File taxes online ) and when it occurred. File taxes online That the loss was a direct result of the casualty. File taxes online 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 taxes online Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File taxes online Theft loss proof. File taxes online   For a theft loss, your records should show all the following. File taxes online When you discovered that your property was missing. File taxes online That your property was stolen. File taxes online That you were the owner of the property. File taxes online Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. File taxes online It is important that you have records that will prove your deduction. File taxes online If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. File taxes online Figuring a Loss Figure the amount of your loss using the following steps. File taxes online Determine your adjusted basis in the property before the casualty or theft. File taxes online Determine the decrease in fair market value of the property as a result of the casualty or theft. File taxes online 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 taxes online 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 taxes online Gain from reimbursement. File taxes online   If your reimbursement is more than your adjusted basis in the property, you have a gain. File taxes online This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. File taxes online If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. File taxes online See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. File taxes online Leased property. File taxes online   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 taxes online 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 taxes online 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 taxes online FMV of stolen property. File taxes online   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. File taxes online Example. File taxes online Several years ago, you purchased silver dollars at face value for $150. File taxes online This is your adjusted basis in the property. File taxes online Your silver dollars were stolen this year. File taxes online The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. File taxes online Your theft loss is $150. File taxes online Recovered stolen property. File taxes online   Recovered stolen property is your property that was stolen and later returned to you. File taxes online 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 taxes online Use this amount to refigure your total loss for the year in which the loss was deducted. File taxes online   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 taxes online But report the difference only up to the amount of the loss that reduced your tax. File taxes online For more information on the amount to report, see Recoveries in chapter 12. File taxes online 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 taxes online However, other measures can also be used to establish certain decreases. File taxes online Appraisal. File taxes online   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 taxes online The appraiser must recognize the effects of any general market decline that may occur along with the casualty. File taxes online This information is needed to limit any deduction to the actual loss resulting from damage to the property. File taxes online   Several factors are important in evaluating the accuracy of an appraisal, including the following. File taxes online The appraiser's familiarity with your property before and after the casualty or theft. File taxes online The appraiser's knowledge of sales of comparable property in the area. File taxes online The appraiser's knowledge of conditions in the area of the casualty. File taxes online The appraiser's method of appraisal. File taxes online    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 taxes online For more information on disasters, see Disaster Area Losses, in Pub. File taxes online 547. File taxes online Cost of cleaning up or making repairs. File taxes online   The cost of repairing damaged property is not part of a casualty loss. File taxes online Neither is the cost of cleaning up after a casualty. File taxes online 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 taxes online The repairs are actually made. File taxes online The repairs are necessary to bring the property back to its condition before the casualty. File taxes online The amount spent for repairs is not excessive. File taxes online The repairs take care of the damage only. File taxes online 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 taxes online Landscaping. File taxes online   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. File taxes online You may be able to measure your loss by what you spend on the following. File taxes online Removing destroyed or damaged trees and shrubs minus any salvage you receive. File taxes online Pruning and other measures taken to preserve damaged trees and shrubs. File taxes online Replanting necessary to restore the property to its approximate value before the casualty. File taxes online Car value. File taxes online    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. File taxes online 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 taxes online 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 taxes online If your car is not listed in the books, determine its value from other sources. File taxes online 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 taxes online 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 taxes online Cost of protection. File taxes online   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. File taxes online The amount you spend on insurance or to board up your house against a storm is not part of your loss. File taxes online   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 taxes online An example would be the cost of a dike to prevent flooding. File taxes online Exception. File taxes online   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 taxes online See Disaster Area Losses in Publication 547. File taxes online Incidental expenses. File taxes online   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 taxes online Replacement cost. File taxes online   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. File taxes online Sentimental value. File taxes online   Do not consider sentimental value when determining your loss. File taxes online 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 taxes online Decline in market value of property in or near casualty area. File taxes online   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 taxes online You have a loss only for actual casualty damage to your property. File taxes online However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. File taxes online Costs of photographs and appraisals. File taxes online    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. File taxes online Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. File taxes online    Appraisals are used to figure the decrease in FMV because of a casualty or theft. File taxes online See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. File taxes online   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 taxes online 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 taxes online For information about miscellaneous deductions, see chapter 28. File taxes online 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 taxes online For more information, see chapter 13. File taxes online 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 taxes online You do not have a casualty or theft loss to the extent you are reimbursed. File taxes online 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 taxes online You must reduce your loss even if you do not receive payment until a later tax year. File taxes online See Reimbursement Received After Deducting Loss , later. File taxes online Failure to file a claim for reimbursement. File taxes online   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. File taxes online Otherwise, you cannot deduct this loss as a casualty or theft loss. File taxes online However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). File taxes online Example. File taxes online You have a car insurance policy with a $1,000 deductible. File taxes online 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 taxes online 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 taxes online Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. File taxes online Other types of reimbursements are discussed next. File taxes online Also see the Instructions for Form 4684. File taxes online Employer's emergency disaster fund. File taxes online   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 taxes online Take into consideration only the amount you used to replace your destroyed or damaged property. File taxes online Example. File taxes online Your home was extensively damaged by a tornado. File taxes online Your loss after reimbursement from your insurance company was $10,000. File taxes online Your employer set up a disaster relief fund for its employees. File taxes online Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. File taxes online You received $4,000 from the fund and spent the entire amount on repairs to your home. File taxes online 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 taxes online Your casualty loss before applying the deduction limits discussed later is $6,000. File taxes online Cash gifts. File taxes online   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 taxes online This applies even if you use the money to pay for repairs to property damaged in the disaster. File taxes online Example. File taxes online Your home was damaged by a hurricane. File taxes online Relatives and neighbors made cash gifts to you that were excludable from your income. File taxes online You used part of the cash gifts to pay for repairs to your home. File taxes online There were no limits or restrictions on how you could use the cash gifts. File taxes online 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 taxes online Insurance payments for living expenses. File taxes online   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. File taxes online You lose the use of your main home because of a casualty. File taxes online Government authorities do not allow you access to your main home because of a casualty or threat of one. File taxes online Inclusion in income. File taxes online   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. File taxes online Report this amount on Form 1040, line 21. File taxes online However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. File taxes online See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. File taxes online   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 taxes online Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. File taxes online Generally, these expenses include the amounts you pay for the following. File taxes online Rent for suitable housing. File taxes online Transportation. File taxes online Food. File taxes online Utilities. File taxes online Miscellaneous services. File taxes online 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 taxes online Example. File taxes online As a result of a fire, you vacated your apartment for a month and moved to a motel. File taxes online You normally pay $525 a month for rent. File taxes online None was charged for the month the apartment was vacated. File taxes online Your motel rent for this month was $1,200. File taxes online You normally pay $200 a month for food. File taxes online Your food expenses for the month you lived in the motel were $400. File taxes online You received $1,100 from your insurance company to cover your living expenses. File taxes online You determine the payment you must include in income as follows. File taxes online 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 taxes online   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 taxes online Example. File taxes online Your main home was destroyed by a tornado in August 2011. File taxes online You regained use of your home in November 2012. File taxes online 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 taxes online You include this amount in income on your 2012 Form 1040. File taxes online 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 taxes online Disaster relief. File taxes online   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 taxes online 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 taxes online For more information, see Disaster Area Losses in Publication 547. File taxes online Disaster unemployment assistance payments are unemployment benefits that are taxable. File taxes online Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. File taxes online 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 taxes online See Disaster Area Losses in Publication 547. File taxes online 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 taxes online This section explains the adjustment you may have to make. File taxes online Actual reimbursement less than expected. File taxes online   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 taxes online Example. File taxes online Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. File taxes online The accident was due to the negligence of the other driver. File taxes online At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. File taxes online You did not have a deductible loss in 2012. File taxes online In January 2013, the court awarded you a judgment of $2,000. File taxes online However, in July it became apparent that you will be unable to collect any amount from the other driver. File taxes online You can deduct the loss in 2013 subject to the limits discussed later. File taxes online Actual reimbursement more than expected. File taxes online   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 taxes online 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 taxes online You do not refigure your tax for the year you claimed the deduction. File taxes online For more information, see Recoveries in chapter 12. File taxes online 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 taxes online 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 taxes online Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. File taxes online 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 taxes online Actual reimbursement same as expected. File taxes online   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 taxes online Example. File taxes online In December 2013, you had a collision while driving your personal car. File taxes online Repairs to the car cost $950. File taxes online You had $100 deductible collision insurance. File taxes online Your insurance company agreed to reimburse you for the rest of the damage. File taxes online Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. File taxes online Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. File taxes online When you receive the $850 from the insurance company in 2014, do not report it as income. File taxes online Single Casualty on Multiple Properties Personal property. File taxes online   Personal property is any property that is not real property. File taxes online 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 taxes online Then combine these separate losses to figure the total loss from that casualty or theft. File taxes online Example. File taxes online A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. File taxes online You did not have fire insurance to cover your loss. File taxes online (This was the only casualty or theft you had during the year. File taxes online ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. File taxes online The rug cost $3,000 and had an FMV of $2,500 just before the fire. File taxes online You bought the table at an auction for $100 before discovering it was an antique. File taxes online It had been appraised at $900 before the fire. File taxes online 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 taxes online   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 taxes online Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. File taxes online Example. File taxes online You bought your home a few years ago. File taxes online You paid $160,000 ($20,000 for the land and $140,000 for the house). File taxes online You also spent $2,000 for landscaping. File taxes online This year a fire destroyed your home. File taxes online The fire also damaged the shrubbery and trees in your yard. File taxes online The fire was your only casualty or theft loss this year. File taxes online Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. File taxes online (The loss to your household furnishings is not shown in this example. File taxes online It would be figured separately on each item, as explained earlier under Personal property . File taxes online ) Shortly after the fire, the insurance company paid you $155,000 for the loss. File taxes online 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 taxes online 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 taxes online You must reduce each casualty or theft loss by $100 ($100 rule). File taxes online You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). File taxes online You make these reductions on Form 4684. File taxes online These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. File taxes online For more detailed explanations and examples, see Publication 547. File taxes online Table 25-1. File taxes online 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 taxes online Apply this rule after you have figured the amount of your loss. File taxes online You must reduce your total casualty or theft loss by 10% of your adjusted gross income. File taxes online Apply this rule after you reduce each loss by $100 (the $100 rule). File taxes online Single Event Apply this rule only once, even if many pieces of property are affected. File taxes online Apply this rule only once, even if many pieces of property are affected. File taxes online More Than One Event Apply to the loss from each event. File taxes online Apply to the total of all your losses from all events. File taxes online More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. File taxes online Apply separately to each person. File taxes online Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. File taxes online Apply as if you were one person. File taxes online Filing Separately Apply separately to each spouse. File taxes online Apply separately to each spouse. File taxes online More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. File taxes online Apply separately to each owner of jointly owned property. File taxes online Property used partly for business and partly for personal purposes. File taxes online   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 taxes online 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 taxes online $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. File taxes online This reduction applies to each total casualty or theft loss. File taxes online It does not matter how many pieces of property are involved in an event. File taxes online Only a single $100 reduction applies. File taxes online Example. File taxes online A hailstorm damages your home and your car. File taxes online Determine the amount of loss, as discussed earlier, for each of these items. File taxes online Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. File taxes online Single event. File taxes online   Generally, events closely related in origin cause a single casualty. File taxes online 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 taxes online 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 taxes online Apply this rule after you reduce each loss by $100. File taxes online For more information, see the Form 4684 instructions. File taxes online If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. File taxes online Example 1. File taxes online In June, you discovered that your house had been burglarized. File taxes online Your loss after insurance reimbursement was $2,000. File taxes online Your adjusted gross income for the year you discovered the theft is $29,500. File taxes online You first apply the $100 rule and then the 10% rule. File taxes online Figure your theft loss deduction as follows. File taxes online 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 taxes online Example 2. File taxes online In March, you had a car accident that totally destroyed your car. File taxes online You did not have collision insurance on your car, so you did not receive any insurance reimbursement. File taxes online Your loss on the car was $1,800. File taxes online In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. File taxes online Your loss on the basement items after reimbursement was $2,100. File taxes online Your adjusted gross income for the year that the accident and fire occurred is $25,000. File taxes online You figure your casualty loss deduction as follows. File taxes online       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 taxes online   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 taxes online 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 taxes online Casualty or theft gains do not include gains you choose to postpone. File taxes online See Publication 547 for information on the postponement of gain. File taxes online Losses more than gains. File taxes online   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 taxes online The rest, if any, is your deductible loss from personal-use property. File taxes online Gains more than losses. File taxes online   If your recognized gains are more than your losses, subtract your losses from your gains. File taxes online The difference is treated as capital gain and must be reported on Schedule D (Form 1040). File taxes online The 10% rule does not apply to your gains. File taxes online When To Report Gains and Losses Gains. File taxes online   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 taxes online 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 taxes online If you have a loss, see Table 25-2 . File taxes online Table 25-2. File taxes online When To Deduct a Loss IF you have a loss. File taxes online . File taxes online . File taxes online THEN deduct it in the year. File taxes online . File taxes online . File taxes online from a casualty, the loss occurred. File taxes online in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. File taxes online from a theft, the theft was discovered. File taxes online on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. File taxes online • bad debt, deposits are totally worthless. File taxes online Losses. File taxes online   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. File taxes online This is true even if you do not repair or replace the damaged property until a later year. File taxes online   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. File taxes online   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 taxes online Loss on deposits. File taxes online   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. File taxes online Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. File taxes online 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 taxes online The year the disaster occurred. File taxes online The year immediately preceding the year the disaster occurred. File taxes online Gains. File taxes online    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. File taxes online For those special rules, see Publication 547. File taxes online Postponed tax deadlines. File taxes online   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. File taxes online 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 taxes online   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 taxes online Go to www. File taxes online irs. File taxes online gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. File taxes online Who is eligible. File taxes online   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. File taxes online Any individual whose main home is located in a covered disaster area (defined next). File taxes online Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. File taxes online Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. File taxes online 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 taxes online The main home or principal place of business does not have to be located in the covered disaster area. File taxes online 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 taxes online The spouse on a joint return with a taxpayer who is eligible for postponements. File taxes online 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 taxes online Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. File taxes online Any other person determined by the IRS to be affected by a federally declared disaster. File taxes online Covered disaster area. File taxes online   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 taxes online Abatement of interest and penalties. File taxes online   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. File taxes online More information. File taxes online   For more information, see Disaster Area Losses in Publication 547. File taxes online How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. File taxes online If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. File taxes online Combine the gains and losses on one Form 4684. File taxes online Follow the form instructions as to which lines to fill out. File taxes online In addition, you must use the appropriate schedule to report a gain or loss. File taxes online The schedule you use depends on whether you have a gain or loss. File taxes online If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. File taxes online   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 taxes online Amounts you spend to restore your property after a casualty increase your adjusted basis. File taxes online See Adjusted Basis in chapter 13 for more information. File taxes online Net operating loss (NOL). File taxes online    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 taxes online 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 taxes online Or, you can use it to lower your tax in a later year. File taxes online You do not have to be in business to have an NOL from a casualty or theft loss. File taxes online For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. File taxes online Prev  Up  Next   Home   More Online Publications