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State 1040 Ez Form

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State 1040 Ez Form

State 1040 ez form Publication 907 - Main Content Table of Contents IncomeDependent Care Benefits Social Security and Railroad Retirement Benefits Disability Pensions Military and Government Disability Pensions Other Payments Itemized DeductionsMedical Expenses Impairment-Related Work Expenses Tax CreditsChild and Dependent Care Credit Credit for the Elderly or the Disabled Earned Income Credit Household Employers Business Tax Incentives How To Get Tax Help Income All income is taxable unless it is specifically excluded by law. State 1040 ez form The following discussions highlight some income items (both taxable and nontaxable) that are of particular interest to people with disabilities and those who care for people with disabilities. State 1040 ez form Dependent Care Benefits Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person(s) while you worked, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. State 1040 ez form Exclusion or deduction. State 1040 ez form   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. State 1040 ez form Your employer can tell you whether your benefit plan qualifies. State 1040 ez form To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. State 1040 ez form You cannot use Form 1040EZ. State 1040 ez form   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. State 1040 ez form Therefore, you would not get an exclusion from wages. State 1040 ez form Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. State 1040 ez form To claim the deduction, you must use Form 2441. State 1040 ez form   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). State 1040 ez form Statement for employee. State 1040 ez form   Your employer must give you a Form W-2 (or similar statement), showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. State 1040 ez form Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. State 1040 ez form Qualifying person(s). State 1040 ez form   A qualifying person is: A qualifying child who is under age 13 whom you can claim as a dependent. State 1040 ez form If the child turned 13 during the year, the child is a qualifying person for the part of the year he or she was under age 13. State 1040 ez form Your disabled spouse who is not physically or mentally able to care for himself or herself. State 1040 ez form Any disabled person who was not physically or mentally able to care for himself or herself whom you can claim as a dependent (or could claim as a dependent except that the person had gross income of $3,900 or more or filed a joint return). State 1040 ez form Any disabled person who was not physically or mentally able to care for himself or herself whom you could claim as a dependent except that you (or your spouse if filing jointly) could be claimed as a dependent on another taxpayer's 2013 return. State 1040 ez form For information about excluding benefits on Form 1040, Form 1040NR, or Form 1040A, see Form 2441 and its instructions. State 1040 ez form Social Security and Railroad Retirement Benefits If you received social security or equivalent Tier 1 railroad retirement (RRTA) benefits during the year, part of the amount you received may be taxable. State 1040 ez form Are any of your benefits taxable?   If the only income you received during the year was your social security or equivalent Tier 1 railroad retirement (RRTA) benefits, your benefits generally are not taxable. State 1040 ez form   If you received income during the year in addition to social security or equivalent Tier 1 railroad retirement (RRTA) benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. State 1040 ez form   For more information, see the instructions for Form 1040, lines 20a and 20b, or Form 1040A, lines 14a and 14b. State 1040 ez form Publication 915, Social Security and Equivalent Railroad Retirement Benefits, contains more detailed information. State 1040 ez form Supplemental security income (SSI) payments. State 1040 ez form   Social security benefits do not include SSI payments, which are not taxable. State 1040 ez form Do not include these payments in your income. State 1040 ez form Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. State 1040 ez form You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. State 1040 ez form Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. State 1040 ez form You may be entitled to a tax credit if you were permanently and totally disabled when you retired. State 1040 ez form For information on this credit, see Publication 524, Credit for the Elderly or the Disabled. State 1040 ez form Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. State 1040 ez form Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. State 1040 ez form For more information on pensions and annuities, see Publication 575, Pension and Annuity Income. State 1040 ez form Retirement and profit-sharing plans. State 1040 ez form   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. State 1040 ez form The payments must be reported as a pension or annuity. State 1040 ez form Accrued leave payment. State 1040 ez form   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. State 1040 ez form The payment is not a disability payment. State 1040 ez form Include it in your income in the tax year you receive it. State 1040 ez form See Publication 525, Taxable and Nontaxable Income, for more information. State 1040 ez form Military and Government Disability Pensions Generally, you must report disability pensions as income, but do not include certain military and government disability pensions. State 1040 ez form For information about military and government disability pensions, see Publication 525. State 1040 ez form VA disability benefits. State 1040 ez form   Do not include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. State 1040 ez form If you are a military retiree and do not receive your disability benefits from the VA, see Publication 525 for more information. State 1040 ez form   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. State 1040 ez form These include: Education, training, and subsistence allowances, Disability compensation and pension payments for disabilities paid either to veterans or their families, Grants for homes designed for wheelchair living, Grants for motor vehicles for veterans who lost their sight or the use of their limbs, Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death, Interest on insurance dividends left on deposit with the VA, Benefits under a dependent-care assistance program, The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001, or Payments made under the VA's compensated work therapy program. State 1040 ez form Other Payments You may receive other payments that are related to your disability. State 1040 ez form The following payments are not taxable. State 1040 ez form Benefit payments from a public welfare fund, such as payments due to blindness. State 1040 ez form Workers' compensation for an occupational sickness or injury if paid under a workers' compensation act or similar law. State 1040 ez form Compensatory (but not punitive) damages for physical injury or physical sickness. State 1040 ez form Disability benefits under a “no-fault” car insurance policy for loss of income or earning capacity as a result of injuries. State 1040 ez form Compensation for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. State 1040 ez form Long-Term Care Insurance Long-term care insurance contracts generally are treated as accident and health insurance contracts. State 1040 ez form Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. State 1040 ez form More detailed information can be found in Publication 525. State 1040 ez form Accelerated Death Benefits You can exclude from income accelerated death benefits you receive on the life of an insured individual if certain requirements are met. State 1040 ez form Accelerated death benefits are amounts received under a life insurance contract before the death of the insured. State 1040 ez form These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. State 1040 ez form This exclusion applies only if the insured was a terminally ill individual or a chronically ill individual. State 1040 ez form For more information, see Publication 525. State 1040 ez form Itemized Deductions If you file Form 1040, you generally can either claim the standard deduction or itemize your deductions. State 1040 ez form You must use Schedule A (Form 1040) to itemize your deductions. State 1040 ez form See your form instructions for information on the standard deduction and the deductions you can itemize. State 1040 ez form The following discussions highlight some itemized deductions that are of particular interest to persons with disabilities. State 1040 ez form Medical Expenses When figuring your deduction for medical expenses, you can generally include medical and dental expenses you pay for yourself, your spouse, and your dependents. State 1040 ez form Medical expenses are the cost of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part or function of the body. State 1040 ez form They include the costs of equipment, supplies, diagnostic devices, and transportation for needed medical care and payments for medical insurance. State 1040 ez form You can deduct only the amount of your medical and dental expenses that is more than 10% (7. State 1040 ez form 5% if either you or your spouse was born before January 2, 1949) of your adjusted gross income shown on Form 1040, line 38. State 1040 ez form The following list highlights some of the medical expenses you can include in figuring your medical expense deduction. State 1040 ez form For more detailed information, see Publication 502, Medical and Dental Expenses (Including the Health Coverage Tax Credit). State 1040 ez form Artificial limbs, contact lenses, eyeglasses, and hearing aids. State 1040 ez form The part of the cost of Braille books and magazines that is more than the price of regular printed editions. State 1040 ez form Cost and repair of special telephone equipment for hearing-impaired persons. State 1040 ez form Cost and maintenance of a wheelchair or a three-wheel motor vehicle commercially known as an “autoette. State 1040 ez form ” Cost and care of a guide dog or other animal aiding a person with a physical disability. State 1040 ez form Costs for a school that furnishes special education if a principal reason for using the school is its resources for relieving a mental or physical disability. State 1040 ez form This includes the cost of teaching Braille and lip reading and the cost of remedial language training to correct a condition caused by a birth defect. State 1040 ez form Premiums for qualified long-term care insurance, up to certain amounts. State 1040 ez form Improvements to a home that do not increase its value if the main purpose is medical care. State 1040 ez form An example is constructing entrance or exit ramps. State 1040 ez form Improvements that increase a home's value, if the main purpose is medical care, may be partly included as a medical expense. State 1040 ez form See Publication 502 for more information. State 1040 ez form Impairment-Related Work Expenses If you are disabled, you can take a business deduction for expenses that are necessary for you to be able to work. State 1040 ez form If you take a business deduction for these impairment-related work expenses, they are not subject to the 10% (7. State 1040 ez form 5% if you or your spouse is age 65 or older) limit that applies to medical expenses. State 1040 ez form You are disabled if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (including, but not limited to, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. State 1040 ez form Impairment-related expenses defined. State 1040 ez form   Impairment-related expenses are those ordinary and necessary business expenses that are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. State 1040 ez form Publication 502 contains more detailed information. State 1040 ez form Tax Credits This discussion highlights three tax credits that may be of interest to people with disabilities and those who care for people with disabilities. State 1040 ez form Child and Dependent Care Credit If you pay someone to care for either your dependent under age 13 or your spouse or dependent who is not able to care for himself or herself, you may be able to get a credit of up to 35% of your expenses. State 1040 ez form To qualify, you must pay these expenses so you can work or look for work. State 1040 ez form The care must be provided for: Your qualifying child who is your dependent and who was under age 13 when the care was provided, Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. State 1040 ez form You can claim the credit on Form 1040 or 1040A. State 1040 ez form You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. State 1040 ez form You figure the credit on Form 2441. State 1040 ez form For more information, see the instructions for Form 1040, line 48, or Form 1040A, line 29. State 1040 ez form Publication 503, Child and Dependent Care Expenses, contains more detailed information. State 1040 ez form Credit for the Elderly or the Disabled You may be able to claim this credit if you are a U. State 1040 ez form S. State 1040 ez form citizen or a resident alien and either of the following apply. State 1040 ez form You were 65 or older at the end of 2013, You were under 65 at the end of 2013, and retired on permanent or total disability. State 1040 ez form You can claim the credit on Form 1040 or 1040A. State 1040 ez form You figure the credit on Schedule R. State 1040 ez form For more information, see the instructions for Form 1040, line 53, or Form 1040A, line 30. State 1040 ez form Publication 524, Credit for the Elderly or the Disabled, contains more detailed information. State 1040 ez form Earned Income Credit This credit is based on the amount of your earned income. State 1040 ez form You can get the credit if your adjusted gross income for 2013 is less than: $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child, $37,870 ($43,210 for married filing jointly) if you have one qualifying child, $43,038 ($48,378 for married filing jointly) if you have two qualifying children, or $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children. State 1040 ez form To figure the credit, use the worksheet in the instructions for Form 1040, 1040A, or 1040EZ. State 1040 ez form If you have a qualifying child, also complete Schedule EIC, Earned Income Credit, and attach it to your Form 1040 or 1040A. State 1040 ez form You cannot use Form 1040EZ if you have a qualifying child. State 1040 ez form Qualifying child. State 1040 ez form   To be a qualifying child, your child must be younger than you (or your spouse if married filing jointly) and under age 19 or a full-time student under age 24 at the end of 2013, or permanently and totally disabled at any time during 2013, regardless of age. State 1040 ez form Earned income. State 1040 ez form   If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. State 1040 ez form However, payments you received from a disability insurance policy that you paid the premiums for are not earned income. State 1040 ez form More information. State 1040 ez form   For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040, line 64a; Form 1040A, line 38a; or Form 1040EZ, line 8a. State 1040 ez form Publication 596, Earned Income Credit (EIC), contains more detailed information. State 1040 ez form Household Employers If you pay someone to work in your home, such as a babysitter or housekeeper, you may be a household employer who has to pay employment taxes. State 1040 ez form A person you hire through an agency is not your employee if the agency controls what work is done and how it is done. State 1040 ez form This control could include setting the fee, requiring regular reports, and providing rules of conduct and appearance. State 1040 ez form In this case you do not have to pay employment taxes on the amount you pay. State 1040 ez form But if you control what work is done and how it is done, the worker is your employee. State 1040 ez form If you possess the right to discharge a worker, that worker is generally considered to be your employee. State 1040 ez form If a worker is your employee, it does not matter that you hired the worker through an agency or from a list provided by an agency. State 1040 ez form To find out if you have to pay employment taxes, see Publication 926, Household Employer's Tax Guide For Wages Paid in 2013. State 1040 ez form Business Tax Incentives If you own or operate a business, or you are looking for work, you should be aware of the following tax incentives for businesses to help persons with disabilities. State 1040 ez form Deduction for costs of removing barriers to the disabled and the elderly—This is a deduction a business can take for making a facility or public transportation vehicle more accessible to and usable by persons who are disabled or elderly. State 1040 ez form For more information, see chapter 7 of Publication 535, Business Expenses. State 1040 ez form Disabled access credit—This is a nonrefundable tax credit for an eligible small business that pays or incurs expenses to provide access to persons with disabilities. State 1040 ez form The expenses must be to enable the eligible small business to comply with the Americans With Disabilities Act of 1990. State 1040 ez form See Form 8826, Disabled Access Credit, for more information. State 1040 ez form Work opportunity credit—This credit provides businesses with an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. State 1040 ez form One targeted group consists of vocational rehabilitation referrals. State 1040 ez form These are individuals who have a physical or mental disability that results in a substantial handicap to employment. State 1040 ez form See Form 5884, Work Opportunity Credit. State 1040 ez form How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. State 1040 ez form Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. State 1040 ez form Free help with your tax return. State 1040 ez form   Free help in preparing your return is available nationwide from IRS-certified volunteers. State 1040 ez form The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. State 1040 ez form The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. State 1040 ez form Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. State 1040 ez form Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. State 1040 ez form To find the nearest VITA or TCE site, visit IRS. State 1040 ez form gov or call 1-800-906-9887. State 1040 ez form   As part of the TCE program, AARP offers the Tax-Aide counseling program. State 1040 ez form To find the nearest AARP Tax-Aide site, visit AARP's website at www. State 1040 ez form aarp. State 1040 ez form org/money/taxaide or call 1-888-227-7669. State 1040 ez form   For more information on these programs, go to IRS. State 1040 ez form gov and enter “VITA” in the search box. State 1040 ez form Internet. State 1040 ez form IRS. State 1040 ez form gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. State 1040 ez form Apply for an Employer Identification Number (EIN). State 1040 ez form Go to IRS. State 1040 ez form gov and enter Apply for an EIN in the search box. State 1040 ez form Request an Electronic Filing PIN by going to IRS. State 1040 ez form gov and entering Electronic Filing PIN in the search box. State 1040 ez form Check the status of your 2013 refund with Where's My Refund? Go to IRS. State 1040 ez form gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. State 1040 ez form If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. State 1040 ez form Check the status of your amended return. State 1040 ez form Go to IRS. State 1040 ez form gov and enter Where's My Amended Return in the search box. State 1040 ez form Download forms, instructions, and publications, including some accessible versions. State 1040 ez form Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. State 1040 ez form gov or IRS2Go. State 1040 ez form Tax return and tax account transcripts are generally available for the current year and past three years. State 1040 ez form Figure your income tax withholding with the IRS Withholding Calculator on IRS. State 1040 ez form gov. State 1040 ez form Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. State 1040 ez form Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. State 1040 ez form gov. State 1040 ez form Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. State 1040 ez form gov or IRS2Go. State 1040 ez form Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. State 1040 ez form An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. State 1040 ez form Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. State 1040 ez form If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. State 1040 ez form Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. State 1040 ez form Locate the nearest volunteer help site with the VITA Locator Tool on IRS. State 1040 ez form gov. State 1040 ez form Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. State 1040 ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. State 1040 ez form Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. State 1040 ez form AARP offers the Tax-Aide counseling program as part of the TCE program. State 1040 ez form Visit AARP's website to find the nearest Tax-Aide location. State 1040 ez form Research your tax questions. State 1040 ez form Search publications and instructions by topic or keyword. State 1040 ez form Read the Internal Revenue Code, regulations, or other official guidance. State 1040 ez form Read Internal Revenue Bulletins. State 1040 ez form Sign up to receive local and national tax news by email. State 1040 ez form Phone. State 1040 ez form You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. State 1040 ez form Download the free IRS2Go mobile app from the iTunes app store or from Google Play. State 1040 ez form Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. State 1040 ez form Call to locate the nearest volunteer help site, 1-800-906-9887. State 1040 ez form Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. State 1040 ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. State 1040 ez form Most VITA and TCE sites offer free electronic filing. State 1040 ez form Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. State 1040 ez form Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. State 1040 ez form Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. State 1040 ez form The automated Where's My Refund? information is available 24 hours a day, 7 days a week. State 1040 ez form If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. State 1040 ez form Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. State 1040 ez form Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. State 1040 ez form Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. State 1040 ez form Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. State 1040 ez form Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). State 1040 ez form You should receive your order within 10 business days. State 1040 ez form Call to order transcripts of your tax returns or tax account, 1-800-908-9946. State 1040 ez form Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. State 1040 ez form Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. State 1040 ez form Call to ask tax questions, 1-800-829-1040. State 1040 ez form Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. State 1040 ez form The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. State 1040 ez form These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. State 1040 ez form gsa. State 1040 ez form gov/fedrelay. State 1040 ez form Walk-in. State 1040 ez form You can find a selection of forms, publications and services — in-person, face-to-face. State 1040 ez form Products. State 1040 ez form You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. State 1040 ez form Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. State 1040 ez form Services. State 1040 ez form You can walk in to your local TAC most business days for personal, face-to-face tax help. State 1040 ez form An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. State 1040 ez form If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. State 1040 ez form No appointment is necessary—just walk in. State 1040 ez form Before visiting, check www. State 1040 ez form irs. State 1040 ez form gov/localcontacts for hours of operation and services provided. State 1040 ez form Mail. State 1040 ez form You can send your order for forms, instructions, and publications to the address below. State 1040 ez form You should receive a response within 10 business days after your request is received. State 1040 ez form  Internal Revenue Service 1201 N. State 1040 ez form Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. State 1040 ez form   The Taxpayer Advocate Service (TAS) is your voice at the IRS. State 1040 ez form Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. State 1040 ez form What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. State 1040 ez form We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. State 1040 ez form You face (or your business is facing) an immediate threat of adverse action. State 1040 ez form You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. State 1040 ez form   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. State 1040 ez form Here's why we can help: TAS is an independent organization within the IRS. State 1040 ez form Our advocates know how to work with the IRS. State 1040 ez form Our services are free and tailored to meet your needs. State 1040 ez form We have offices in every state, the District of Columbia, and Puerto Rico. State 1040 ez form How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. State 1040 ez form irs. State 1040 ez form gov/advocate, or call us toll-free at 1-877-777-4778. State 1040 ez form How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. State 1040 ez form If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. State 1040 ez form irs. State 1040 ez form gov/sams. State 1040 ez form Low Income Taxpayer Clinics. State 1040 ez form   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. State 1040 ez form Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. State 1040 ez form Visit www. State 1040 ez form TaxpayerAdvocate. State 1040 ez form irs. State 1040 ez form gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. State 1040 ez form Prev  Up  Next   Home   More Online Publications
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The State 1040 Ez Form

State 1040 ez form Publication 547 - Main Content Table of Contents CasualtyFamily pet. State 1040 ez form Progressive deterioration. State 1040 ez form Special Procedure for Damage From Corrosive Drywall Theft Loss on Deposits Proof of Loss Figuring a LossGain from reimbursement. State 1040 ez form Business or income-producing property. State 1040 ez form Loss of inventory. State 1040 ez form Leased property. State 1040 ez form Exception for personal-use real property. State 1040 ez form Decrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Deduction Limits2% Rule $100 Rule 10% Rule Figuring the Deduction Figuring a GainPostponement of Gain When To Report Gains and LossesLoss on deposits. State 1040 ez form Lessee's loss. State 1040 ez form Disaster Area LossesDisaster loss to inventory. State 1040 ez form Main home in disaster area. State 1040 ez form Unsafe home. State 1040 ez form Time limit for making choice. State 1040 ez form Revoking your choice. State 1040 ez form Figuring the loss deduction. State 1040 ez form How to report the loss on Form 1040X. State 1040 ez form Records. State 1040 ez form Need a copy of your tax return for the preceding year? Postponed Tax Deadlines Contacting the Federal Emergency Management Agency (FEMA) How To Report Gains and LossesProperty held 1 year or less. State 1040 ez form Property held more than 1 year. State 1040 ez form Depreciable property. State 1040 ez form Adjustments to Basis If Deductions Are More Than Income How To Get Tax HelpLow Income Taxpayer Clinics Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. State 1040 ez form A sudden event is one that is swift, not gradual or progressive. State 1040 ez form An unexpected event is one that is ordinarily unanticipated and unintended. State 1040 ez form 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. State 1040 ez form Generally, casualty losses are deductible during the taxable year that the loss occurred. State 1040 ez form See Table 3, later. State 1040 ez form Deductible losses. State 1040 ez form   Deductible casualty losses can result from a number of different causes, including the following. State 1040 ez form Car accidents (but see Nondeductible losses , next, for exceptions). State 1040 ez form Earthquakes. State 1040 ez form Fires (but see Nondeductible losses , next, for exceptions). State 1040 ez form Floods. State 1040 ez form Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses , later. State 1040 ez form Mine cave-ins. State 1040 ez form Shipwrecks. State 1040 ez form Sonic booms. State 1040 ez form Storms, including hurricanes and tornadoes. State 1040 ez form Terrorist attacks. State 1040 ez form Vandalism. State 1040 ez form Volcanic eruptions. State 1040 ez form Nondeductible losses. State 1040 ez form   A casualty loss is not deductible if the damage or destruction is caused by the following. State 1040 ez form Accidentally breaking articles such as glassware or china under normal conditions. State 1040 ez form A family pet (explained below). State 1040 ez form A fire if you willfully set it, or pay someone else to set it. State 1040 ez form A car accident if your willful negligence or willful act caused it. State 1040 ez form The same is true if the willful act or willful negligence of someone acting for you caused the accident. State 1040 ez form Progressive deterioration (explained below). State 1040 ez form However, see Special Procedure for Damage From Corrosive Drywall , later. State 1040 ez form Family pet. State 1040 ez form   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. State 1040 ez form Example. State 1040 ez form Your antique oriental rug was damaged by your new puppy before it was housebroken. State 1040 ez form Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. State 1040 ez form Progressive deterioration. State 1040 ez form   Loss of property due to progressive deterioration is not deductible as a casualty loss. State 1040 ez form This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. State 1040 ez form The following are examples of damage due to progressive deterioration. State 1040 ez form The steady weakening of a building due to normal wind and weather conditions. State 1040 ez form The deterioration and damage to a water heater that bursts. State 1040 ez form However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. State 1040 ez form Most losses of property caused by droughts. State 1040 ez form To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. State 1040 ez form Termite or moth damage. State 1040 ez form The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. State 1040 ez form However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. State 1040 ez form Special Procedure for Damage From Corrosive Drywall Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. State 1040 ez form Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. State 1040 ez form For example, amounts you paid for repairs in 2013 are deductible on your 2013 tax return and amounts you paid for repairs in 2012 are deductible on your 2012 tax return. State 1040 ez form Note. State 1040 ez form If you paid for any repairs before 2013 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U. State 1040 ez form S. State 1040 ez form Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. State 1040 ez form Form 4684 for the appropriate year can be found at IRS. State 1040 ez form gov. State 1040 ez form Generally, Form 1040X must be filed within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. State 1040 ez form Corrosive drywall. State 1040 ez form   For purposes of this special procedure, “corrosive drywall” means drywall that is identified as problem drywall under the two-step identification method published by the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) in their interim guidance dated January 28, 2010, as revised by the CPSC and HUD. State 1040 ez form The revised identification guidance and remediation guidelines are available at www. State 1040 ez form cpsc. State 1040 ez form gov/Safety-Education/Safety-Education-Centers/Drywall. State 1040 ez form Special instructions for completing Form 4684. State 1040 ez form   If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. State 1040 ez form The IRS will not challenge your treatment of damage resulting from corrosive drywall as a casualty loss if you determine and report the loss as explained below. State 1040 ez form Top margin of Form 4684. State 1040 ez form   Enter “Revenue Procedure 2010-36”. State 1040 ez form Line 1. State 1040 ez form   Enter the information required by the line 1 instructions. State 1040 ez form Line 2. State 1040 ez form   Skip this line. State 1040 ez form Line 3. State 1040 ez form   Enter the amount of insurance or other reimbursements you received (including through litigation). State 1040 ez form If none, enter -0-. State 1040 ez form Lines 4–7. State 1040 ez form   Skip these lines. State 1040 ez form Line 8. State 1040 ez form   Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. State 1040 ez form Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. State 1040 ez form Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. State 1040 ez form If you replaced a household appliance instead of repairing it, enter the lesser of: The current cost to replace the original appliance, or The basis of the original appliance (generally its cost). State 1040 ez form Line 9. State 1040 ez form   If line 8 is more than line 3, do one of the following. State 1040 ez form If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8. State 1040 ez form If item (1) does not apply to you, enter the full amount of the difference between lines 3 and 8. State 1040 ez form If line 8 is less than or equal to line 3, you cannot claim a casualty loss deduction using this special procedure. State 1040 ez form    If you have a pending claim for reimbursement (or you intend to pursue reimbursement), you may have income or an additional deduction in a later tax year depending on the actual amount of reimbursement received. State 1040 ez form See Reimbursement Received After Deducting Loss, later. State 1040 ez form Lines 10–18. State 1040 ez form   Complete these lines according to the Instructions for Form 4684. State 1040 ez form Choosing not to follow this special procedure. State 1040 ez form   If you choose not to follow this special procedure, you are subject to all of the provisions that apply to the deductibility of casualty losses, and you must complete lines 1–9 according to the Instructions for Form 4684. State 1040 ez form This means, for example, that you must establish that the damage, destruction, or loss of property resulted from an identifiable event as defined earlier under Casualty . State 1040 ez form Furthermore, you must have proof that shows the following. State 1040 ez form The loss is properly deductible in the tax year you claimed it and not in some other year. State 1040 ez form See When To Report Gains and Losses , later. State 1040 ez form The amount of the claimed loss. State 1040 ez form See Proof of Loss , later. State 1040 ez form No claim for reimbursement of any portion of the loss exists for which there is a reasonable prospect of recovery. State 1040 ez form See When To Report Gains and Losses , later. State 1040 ez form Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. State 1040 ez form The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. State 1040 ez form You do not need to show a conviction for theft. State 1040 ez form Theft includes the taking of money or property by the following means. State 1040 ez form Blackmail. State 1040 ez form Burglary. State 1040 ez form Embezzlement. State 1040 ez form Extortion. State 1040 ez form Kidnapping for ransom. State 1040 ez form Larceny. State 1040 ez form Robbery. State 1040 ez form The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. State 1040 ez form Decline in market value of stock. State 1040 ez form   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. State 1040 ez form 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. State 1040 ez form You report a capital loss on Schedule D (Form 1040). State 1040 ez form For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. State 1040 ez form Mislaid or lost property. State 1040 ez form    The simple disappearance of money or property is not a theft. State 1040 ez form 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. State 1040 ez form Sudden, unexpected, and unusual events were defined earlier under Casualty . State 1040 ez form Example. State 1040 ez form A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. State 1040 ez form The diamond falls from the ring and is never found. State 1040 ez form The loss of the diamond is a casualty. State 1040 ez form Losses from Ponzi-type investment schemes. State 1040 ez form   The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes: Revenue Ruling 2009-9, 2009-14 I. State 1040 ez form R. State 1040 ez form B. State 1040 ez form 735 (available at www. State 1040 ez form irs. State 1040 ez form gov/irb/2009-14_IRB/ar07. State 1040 ez form html). State 1040 ez form Revenue Procedure 2009-20, 2009-14 I. State 1040 ez form R. State 1040 ez form B. State 1040 ez form 749 (available at www. State 1040 ez form irs. State 1040 ez form gov/irb/2009-14_IRB/ar11. State 1040 ez form html). State 1040 ez form Revenue Procedure 2011-58, 2011-50 I. State 1040 ez form R. State 1040 ez form B. State 1040 ez form 847 (available at www. State 1040 ez form irs. State 1040 ez form gov/irb/2011-50_IRB/ar11. State 1040 ez form html). State 1040 ez form 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. State 1040 ez form Skip lines 19 to 27, but you must fill out Section B, lines 29 to 39, as appropriate. State 1040 ez form Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. State 1040 ez form You do not need to complete Appendix A. State 1040 ez form For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. State 1040 ez form   If you choose not to use the procedures in Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. State 1040 ez form Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. State 1040 ez form If you incurred this type of loss, you can choose one of the following ways to deduct the loss. State 1040 ez form As a casualty loss. State 1040 ez form As an ordinary loss. State 1040 ez form As a nonbusiness bad debt. State 1040 ez form Casualty loss or ordinary loss. State 1040 ez form   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. State 1040 ez form The choice generally is 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. State 1040 ez form 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. State 1040 ez form 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. State 1040 ez form Once you make the choice, you cannot change it without permission from the Internal Revenue Service. State 1040 ez form   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. State 1040 ez form The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. State 1040 ez form Your loss is subject to the 2%-of-adjusted-gross-income limit. State 1040 ez form You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. State 1040 ez form Nonbusiness bad debt. State 1040 ez form   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. State 1040 ez form How to report. State 1040 ez form   The kind of deduction you choose for your loss on deposits determines how you report your loss. State 1040 ez form See Table 1. State 1040 ez form More information. State 1040 ez form   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684. State 1040 ez form Deducted loss recovered. State 1040 ez form   If you recover an amount you deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of recovery. State 1040 ez form If any part of the original deduction did not reduce your tax in the earlier year, you do not have to include that part of the recovery in your income. State 1040 ez form For more information, see Recoveries in Publication 525. State 1040 ez form Proof of Loss To deduct a casualty or theft loss, you must be able to show that there was a casualty or theft. State 1040 ez form You also must be able to support the amount you take as a deduction. State 1040 ez form Casualty loss proof. State 1040 ez form   For a casualty loss, you should be able to show all of the following. State 1040 ez form The type of casualty (car accident, fire, storm, etc. State 1040 ez form ) and when it occurred. State 1040 ez form That the loss was a direct result of the casualty. State 1040 ez form 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. State 1040 ez form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. State 1040 ez form Theft loss proof. State 1040 ez form   For a theft loss, you should be able to show all of the following. State 1040 ez form When you discovered that your property was missing. State 1040 ez form That your property was stolen. State 1040 ez form That you were the owner of the property. State 1040 ez form Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. State 1040 ez form    It is important that you have records that will prove your deduction. State 1040 ez form If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. State 1040 ez form Figuring a Loss To determine your deduction for a casualty or theft loss, you must first figure your loss. State 1040 ez form Table 1. State 1040 ez form Reporting Loss on Deposits IF you choose to report the loss as a(n). State 1040 ez form . State 1040 ez form . State 1040 ez form   THEN report it on. State 1040 ez form . State 1040 ez form . State 1040 ez form casualty loss   Form 4684 and Schedule A  (Form 1040). State 1040 ez form ordinary loss   Schedule A (Form 1040). State 1040 ez form nonbusiness bad debt   Form 8949 and Schedule D (Form 1040). State 1040 ez form Amount of loss. State 1040 ez form   Figure the amount of your loss using the following steps. State 1040 ez form Determine your adjusted basis in the property before the casualty or theft. State 1040 ez form Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. State 1040 ez form From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. State 1040 ez form 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. State 1040 ez form Gain from reimbursement. State 1040 ez form   If your reimbursement is more than your adjusted basis in the property, you have a gain. State 1040 ez form This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. State 1040 ez form If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. State 1040 ez form See Figuring a Gain , later. State 1040 ez form Business or income-producing property. State 1040 ez form   If you have business or income-producing property, such as rental property, and it is stolen or completely destroyed, the decrease in FMV is not considered. State 1040 ez form Your loss is figured as follows:   Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive   Loss of inventory. State 1040 ez form   There are two ways you can deduct a casualty or theft loss of inventory, including items you hold for sale to customers. State 1040 ez form   One way is to deduct the loss through the increase in the cost of goods sold by properly reporting your opening and closing inventories. State 1040 ez form Do not claim this loss again as a casualty or theft loss. State 1040 ez form If you take the loss through the increase in the cost of goods sold, include any insurance or other reimbursement you receive for the loss in gross income. State 1040 ez form   The other way is to deduct the loss separately. State 1040 ez form If you deduct it separately, eliminate the affected inventory items from the cost of goods sold by making a downward adjustment to opening inventory or purchases. State 1040 ez form Reduce the loss by the reimbursement you received. State 1040 ez form Do not include the reimbursement in gross income. State 1040 ez form If you do not receive the reimbursement by the end of the year, you may not claim a loss to the extent you have a reasonable prospect of recovery. State 1040 ez form Leased property. State 1040 ez form   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. State 1040 ez form Separate computations. State 1040 ez form   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. State 1040 ez form Then combine the losses to determine the total loss from that casualty or theft. State 1040 ez form Exception for personal-use real property. State 1040 ez form   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. State 1040 ez form Figure the loss using the smaller of the following. State 1040 ez form The decrease in FMV of the entire property. State 1040 ez form The adjusted basis of the entire property. State 1040 ez form   See Real property under Figuring the Deduction, later. State 1040 ez form 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. State 1040 ez form 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. State 1040 ez form FMV of stolen property. State 1040 ez form   The FMV of property immediately after a theft is considered to be zero because you no longer have the property. State 1040 ez form Example. State 1040 ez form Several years ago, you purchased silver dollars at face value for $150. State 1040 ez form This is your adjusted basis in the property. State 1040 ez form Your silver dollars were stolen this year. State 1040 ez form The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. State 1040 ez form Your theft loss is $150. State 1040 ez form Recovered stolen property. State 1040 ez form   Recovered stolen property is your property that was stolen and later returned to you. State 1040 ez form 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. State 1040 ez form Use this amount to refigure your total loss for the year in which the loss was deducted. State 1040 ez form   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. State 1040 ez form But report the difference only up to the amount of the loss that reduced your tax. State 1040 ez form For more information on the amount to report, see Recoveries in Publication 525. State 1040 ez form 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. State 1040 ez form However, other measures also can be used to establish certain decreases. State 1040 ez form See Appraisal and Cost of cleaning up or making repairs , next. State 1040 ez form Appraisal. State 1040 ez form   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterwards should be made by a competent appraiser. State 1040 ez form The appraiser must recognize the effects of any general market decline that may occur along with the casualty. State 1040 ez form This information is needed to limit any deduction to the actual loss resulting from damage to the property. State 1040 ez form   Several factors are important in evaluating the accuracy of an appraisal, including the following. State 1040 ez form The appraiser's familiarity with your property before and after the casualty or theft. State 1040 ez form The appraiser's knowledge of sales of comparable property in the area. State 1040 ez form The appraiser's knowledge of conditions in the area of the casualty. State 1040 ez form The appraiser's method of appraisal. State 1040 ez form 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. State 1040 ez form For more information on disasters, see Disaster Area Losses, later. State 1040 ez form Cost of cleaning up or making repairs. State 1040 ez form   The cost of repairing damaged property is not part of a casualty loss. State 1040 ez form Neither is the cost of cleaning up after a casualty. State 1040 ez form But you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. State 1040 ez form The repairs are actually made. State 1040 ez form The repairs are necessary to bring the property back to its condition before the casualty. State 1040 ez form The amount spent for repairs is not excessive. State 1040 ez form The repairs take care of the damage only. State 1040 ez form The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. State 1040 ez form Landscaping. State 1040 ez form   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. State 1040 ez form You may be able to measure your loss by what you spend on the following. State 1040 ez form Removing destroyed or damaged trees and shrubs, minus any salvage you receive. State 1040 ez form Pruning and other measures taken to preserve damaged trees and shrubs. State 1040 ez form Replanting necessary to restore the property to its approximate value before the casualty. State 1040 ez form Car value. State 1040 ez form   Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. State 1040 ez form You can use the books' retail values and modify them by factors such as the mileage and condition of your car to figure its value. State 1040 ez form 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. State 1040 ez form If your car is not listed in the books, determine its value from other sources. State 1040 ez form A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. State 1040 ez form 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. State 1040 ez form Cost of protection. State 1040 ez form   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. State 1040 ez form The amount you spend on insurance or to board up your house against a storm is not part of your loss. State 1040 ez form If the property is business property, these expenses are deductible as business expenses. State 1040 ez form   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. State 1040 ez form An example would be the cost of a dike to prevent flooding. State 1040 ez form Exception. State 1040 ez form   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 (discussed later under Disaster Area Losses ). State 1040 ez form Related expenses. State 1040 ez form   The incidental expenses 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. State 1040 ez form However, they may be deductible as business expenses if the damaged or stolen property is business property. State 1040 ez form Replacement cost. State 1040 ez form   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. State 1040 ez form Example. State 1040 ez form You bought a new chair 4 years ago for $300. State 1040 ez form In April, a fire destroyed the chair. State 1040 ez form You estimate that it would cost $500 to replace it. State 1040 ez form If you had sold the chair before the fire, you estimate that you could have received only $100 for it because it was 4 years old. State 1040 ez form The chair was not insured. State 1040 ez form Your loss is $100, the FMV of the chair before the fire. State 1040 ez form It is not $500, the replacement cost. State 1040 ez form Sentimental value. State 1040 ez form   Do not consider sentimental value when determining your loss. State 1040 ez form 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. State 1040 ez form Decline in market value of property in or near casualty area. State 1040 ez form   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. State 1040 ez form You have a loss only for actual casualty damage to your property. State 1040 ez form However, if your home is in a federally declared disaster area, see Disaster Area Losses , later. State 1040 ez form Costs of photographs and appraisals. State 1040 ez form   Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. State 1040 ez form Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. State 1040 ez form   Appraisals are used to figure the decrease in FMV because of a casualty or theft. State 1040 ez form See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. State 1040 ez form   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. State 1040 ez form They are expenses in determining your tax liability. State 1040 ez form You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). State 1040 ez form Adjusted Basis The measure of your investment in the property you own is its basis. State 1040 ez form For property you buy, your basis is usually its cost to you. State 1040 ez form For property you acquire in some other way, such as inheriting it, receiving it as a gift, or getting it in a nontaxable exchange, you must figure your basis in another way, as explained in Publication 551. State 1040 ez form If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. State 1040 ez form Adjustments to basis. State 1040 ez form    While you own the property, various events may take place that change your basis. State 1040 ez form Some events, such as additions or permanent improvements to the property, increase basis. State 1040 ez form Others, such as earlier casualty losses and depreciation deductions, decrease basis. State 1040 ez form When you add the increases to the basis and subtract the decreases from the basis, the result is your adjusted basis. State 1040 ez form See Publication 551 for more information on figuring the basis of your property. State 1040 ez form Insurance and Other Reimbursements If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. State 1040 ez form You do not have a casualty or theft loss to the extent you are reimbursed. State 1040 ez form If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. State 1040 ez form You must reduce your loss even if you do not receive payment until a later tax year. State 1040 ez form See Reimbursement Received After Deducting Loss , later. State 1040 ez form Failure to file a claim for reimbursement. State 1040 ez form   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. State 1040 ez form Otherwise, you cannot deduct this loss as a casualty or theft. State 1040 ez form The portion of the loss usually not covered by insurance (for example, a deductible) is not subject to this rule. State 1040 ez form Example. State 1040 ez form You have a car insurance policy with a $1,000 deductible. State 1040 ez form Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the $100 and 10% rules, discussed later). State 1040 ez form This is true, even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. State 1040 ez form Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. State 1040 ez form Other types of reimbursements are discussed next. State 1040 ez form Also see the Instructions for Form 4684. State 1040 ez form Employer's emergency disaster fund. State 1040 ez form   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. State 1040 ez form Take into consideration only the amount you used to replace your destroyed or damaged property. State 1040 ez form Example. State 1040 ez form Your home was extensively damaged by a tornado. State 1040 ez form Your loss after reimbursement from your insurance company was $10,000. State 1040 ez form Your employer set up a disaster relief fund for its employees. State 1040 ez form Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. State 1040 ez form You received $4,000 from the fund and spent the entire amount on repairs to your home. State 1040 ez form In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. State 1040 ez form Your casualty loss before applying the deduction limits (discussed later) is $6,000. State 1040 ez form Cash gifts. State 1040 ez form   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. State 1040 ez form This applies even if you use the money to pay for repairs to property damaged in the disaster. State 1040 ez form Example. State 1040 ez form Your home was damaged by a hurricane. State 1040 ez form Relatives and neighbors made cash gifts to you that were excludable from your income. State 1040 ez form You used part of the cash gifts to pay for repairs to your home. State 1040 ez form There were no limits or restrictions on how you could use the cash gifts. State 1040 ez form It was an excludable gift, so the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. State 1040 ez form Insurance payments for living expenses. State 1040 ez form   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. State 1040 ez form You lose the use of your main home because of a casualty. State 1040 ez form Government authorities do not allow you access to your main home because of a casualty or threat of one. State 1040 ez form Inclusion in income. State 1040 ez form   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. State 1040 ez form Report this amount on Form 1040, line 21. State 1040 ez form However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. State 1040 ez form See Qualified disaster relief payments , later, under Disaster Area Losses. State 1040 ez form   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. State 1040 ez form Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. State 1040 ez form Generally, these expenses include the amounts you pay for the following. State 1040 ez form Renting suitable housing. State 1040 ez form Transportation. State 1040 ez form Food. State 1040 ez form Utilities. State 1040 ez form Miscellaneous services. State 1040 ez form 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. State 1040 ez form Example. State 1040 ez form As a result of a fire, you vacated your apartment for a month and moved to a motel. State 1040 ez form You normally pay $525 a month for rent. State 1040 ez form None was charged for the month the apartment was vacated. State 1040 ez form Your motel rent for this month was $1,200. State 1040 ez form You normally pay $200 a month for food. State 1040 ez form Your food expenses for the month you lived in the motel were $400. State 1040 ez form You received $1,100 from your insurance company to cover your living expenses. State 1040 ez form You determine the payment you must include in income as follows. State 1040 ez form 1. State 1040 ez form Insurance payment for living expenses $1,100 2. State 1040 ez form Actual expenses during the month you are unable to use your home because of the fire $1,600   3. State 1040 ez form Normal living expenses 725   4. State 1040 ez form Temporary increase in living expenses: Subtract line 3  from line 2 875 5. State 1040 ez form Amount of payment includible in income: Subtract line 4 from line 1 $ 225 Tax year of inclusion. State 1040 ez form   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. State 1040 ez form Example. State 1040 ez form Your main home was destroyed by a tornado in August 2011. State 1040 ez form You regained use of your home in November 2012. State 1040 ez form The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. State 1040 ez form You include this amount in income on your 2012 Form 1040. State 1040 ez form 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. State 1040 ez form Disaster relief. State 1040 ez form   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. State 1040 ez form Table 2. State 1040 ez form Deduction Limit Rules for Personal-Use and Employee Property       $100 Rule 10% Rule 2% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. State 1040 ez form Apply this rule to personal-use property after you have figured the amount of your loss. State 1040 ez form You must reduce your total casualty or theft loss by 10% of your adjusted gross income. State 1040 ez form Apply this rule to personal-use property after you reduce each loss by $100 (the $100 rule). State 1040 ez form You must reduce your total casualty or theft loss by 2% of your adjusted gross income. State 1040 ez form Apply this rule to property you used in performing services as an employee after you have figured the amount of your loss and added it to your job expenses and most other miscellaneous itemized deductions. State 1040 ez form Single Event Apply this rule only once, even if many pieces of property are affected. State 1040 ez form Apply this rule only once, even if many pieces of property are affected. State 1040 ez form Apply this rule only once, even if many pieces of property are affected. State 1040 ez form More Than One Event Apply to the loss from each event. State 1040 ez form Apply to the total of all your losses from all events. State 1040 ez form Apply to the total of all your losses from all events. State 1040 ez form More Than One Person— With Loss From the   Same Event  (other than a married couple  filing jointly) Apply separately to each person. State 1040 ez form Apply separately to each person. State 1040 ez form Apply separately to each person. State 1040 ez form Married Couple—  With Loss From the  Same Event Filing Joint Return Apply as if you were one person. State 1040 ez form Apply as if you were one person. State 1040 ez form Apply as if you were one person. State 1040 ez form Filing Separate Return Apply separately to each spouse. State 1040 ez form Apply separately to each spouse. State 1040 ez form Apply separately to each spouse. State 1040 ez form More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. State 1040 ez form Apply separately to each owner of jointly owned property. State 1040 ez form Apply separately to each owner of jointly owned property. State 1040 ez form    Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster, are not taxable income to you. State 1040 ez form For more information, see Qualified disaster relief payments under Disaster Area Losses, later. State 1040 ez form   Disaster unemployment assistance payments are unemployment benefits that are taxable. State 1040 ez form   Generally, disaster relief grants received under the Robert T. State 1040 ez form Stafford Disaster Relief and Emergency Assistance Act are not included in your income. State 1040 ez form See Federal disaster relief grants , later, under Disaster Area Losses. State 1040 ez form Loan proceeds. State 1040 ez form   Do not reduce your casualty loss by loan proceeds you use to rehabilitate or replace property on which you are claiming a casualty loss deduction. State 1040 ez form If you have a federal loan that is canceled (forgiven), see Federal loan canceled , later, under Disaster Area Losses. State 1040 ez form Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. State 1040 ez form This section explains the adjustment you may have to make. State 1040 ez form Actual reimbursement less than expected. State 1040 ez form   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. State 1040 ez form Example. State 1040 ez form Your personal car had a FMV of $2,000 when it was destroyed in a collision with another car in 2012. State 1040 ez form The accident was due to the negligence of the other driver. State 1040 ez form At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. State 1040 ez form You did not have a deductible loss in 2012. State 1040 ez form In January 2013, the court awards you a judgment of $2,000. State 1040 ez form However, in July it becomes apparent that you will be unable to collect any amount from the other driver. State 1040 ez form Since this is your only casualty or theft loss, you can deduct the loss in 2013 that is figured by applying the Deduction Limits (discussed later). State 1040 ez form Actual reimbursement more than expected. State 1040 ez form   If you later receive more reimbursement than you expected, after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. State 1040 ez form 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. State 1040 ez form You do not refigure your tax for the year you claimed the deduction. State 1040 ez form See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. State 1040 ez form Example. State 1040 ez form In 2012, a hurricane destroyed your motorboat. State 1040 ez form Your loss was $3,000, and you estimated that your insurance would cover $2,500 of it. State 1040 ez form You did not itemize deductions on your 2012 return, so you could not deduct the loss. State 1040 ez form When the insurance company reimburses you for the loss, you do not report any of the reimbursement as income. State 1040 ez form This is true even if it is for the full $3,000 because you did not deduct the loss on your 2012 return. State 1040 ez form The loss did not reduce your tax. State 1040 ez form    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. State 1040 ez form 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. State 1040 ez form Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. State 1040 ez form You may be able to postpone reporting any remaining gain as explained under Postponement of Gain, later. State 1040 ez form Actual reimbursement same as expected. State 1040 ez form   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. State 1040 ez form Example. State 1040 ez form In December 2013, you had a collision while driving your personal car. State 1040 ez form Repairs to the car cost $950. State 1040 ez form You had $100 deductible collision insurance. State 1040 ez form Your insurance company agreed to reimburse you for the rest of the damage. State 1040 ez form Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. State 1040 ez form Due to the $100 rule, you cannot deduct the $100 you paid as the deductible. State 1040 ez form When you receive the $850 from the insurance company in 2014, do not report it as income. State 1040 ez form Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. State 1040 ez form The deduction for casualty and theft losses of employee property and personal-use property is limited. State 1040 ez form A loss on employee property is subject to the 2% rule, discussed next. State 1040 ez form With certain exceptions, a loss on property you own for your personal use is subject to the $100 and 10% rules, discussed later. State 1040 ez form The 2%, $100, and 10% rules are also summarized in Table 2 . State 1040 ez form Losses on business property (other than employee property) and income-producing property are not subject to these rules. State 1040 ez form However, if your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. State 1040 ez form See the Instructions for Form 4684, Section B. State 1040 ez form If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. State 1040 ez form 2% Rule The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040) or Form 1040NR, Schedule A, must be reduced by 2% of your adjusted gross income. State 1040 ez form Employee property is property used in performing services as an employee. State 1040 ez form $100 Rule After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce that loss by $100. State 1040 ez form This reduction applies to each total casualty or theft loss. State 1040 ez form It does not matter how many pieces of property are involved in an event. State 1040 ez form Only a single $100 reduction applies. State 1040 ez form Example. State 1040 ez form You have $750 deductible collision insurance on your car. State 1040 ez form The car is damaged in a collision. State 1040 ez form The insurance company pays you for the damage minus the $750 deductible. State 1040 ez form The amount of the casualty loss is based solely on the deductible. State 1040 ez form The casualty loss is $650 ($750 − $100) because the first $100 of a casualty loss on personal-use property is not deductible. State 1040 ez form Single event. State 1040 ez form   Generally, events closely related in origin cause a single casualty. State 1040 ez form 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. State 1040 ez form A single casualty may also damage two or more pieces of property, such as a hailstorm that damages both your home and your car parked in your driveway. State 1040 ez form Example 1. State 1040 ez form A thunderstorm destroyed your pleasure boat. State 1040 ez form You also lost some boating equipment in the storm. State 1040 ez form Your loss was $5,000 on the boat and $1,200 on the equipment. State 1040 ez form Your insurance company reimbursed you $4,500 for the damage to your boat. State 1040 ez form You had no insurance coverage on the equipment. State 1040 ez form Your casualty loss is from a single event and the $100 rule applies once. State 1040 ez form Figure your loss before applying the 10% rule (discussed later) as follows. State 1040 ez form     Boat Equipment 1. State 1040 ez form Loss $5,000 $1,200 2. State 1040 ez form Subtract insurance 4,500 -0- 3. State 1040 ez form Loss after reimbursement $ 500 $1,200 4. State 1040 ez form Total loss $1,700 5. State 1040 ez form Subtract $100 100 6. State 1040 ez form Loss before 10% rule $1,600 Example 2. State 1040 ez form Thieves broke into your home in January and stole a ring and a fur coat. State 1040 ez form You had a loss of $200 on the ring and $700 on the coat. State 1040 ez form This is a single theft. State 1040 ez form The $100 rule applies to the total $900 loss. State 1040 ez form Example 3. State 1040 ez form In September, hurricane winds blew the roof off your home. State 1040 ez form Flood waters caused by the hurricane further damaged your home and destroyed your furniture and personal car. State 1040 ez form This is considered a single casualty. State 1040 ez form The $100 rule is applied to your total loss from the flood waters and the wind. State 1040 ez form More than one loss. State 1040 ez form   If you have more than one casualty or theft loss during your tax year, you must reduce each loss by $100. State 1040 ez form Example. State 1040 ez form Your family car was damaged in an accident in January. State 1040 ez form Your loss after the insurance reimbursement was $75. State 1040 ez form In February, your car was damaged in another accident. State 1040 ez form This time your loss after the insurance reimbursement was $90. State 1040 ez form Apply the $100 rule to each separate casualty loss. State 1040 ez form Since neither accident resulted in a loss of over $100, you are not entitled to any deduction for these accidents. State 1040 ez form More than one person. State 1040 ez form   If two or more individuals (other than a husband and wife filing a joint return) have losses from the same casualty or theft, the $100 rule applies separately to each individual. State 1040 ez form Example. State 1040 ez form A fire damaged your house and also damaged the personal property of your house guest. State 1040 ez form You must reduce your loss by $100. State 1040 ez form Your house guest must reduce his or her loss by $100. State 1040 ez form Married taxpayers. State 1040 ez form   If you and your spouse file a joint return, you are treated as one individual in applying the $100 rule. State 1040 ez form It does not matter whether you own the property jointly or separately. State 1040 ez form   If you and your spouse have a casualty or theft loss and you file separate returns, each of you must reduce your loss by $100. State 1040 ez form This is true even if you own the property jointly. State 1040 ez form If one spouse owns the property, only that spouse can figure a loss deduction on a separate return. State 1040 ez form   If the casualty or theft loss is on property you own as tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. State 1040 ez form Neither of you can figure your deduction on the entire loss on a separate return. State 1040 ez form Each of you must reduce the loss by $100. State 1040 ez form More than one owner. State 1040 ez form   If two or more individuals (other than a husband and wife filing a joint return) have a loss on property jointly owned, the $100 rule applies separately to each. State 1040 ez form For example, if two sisters live together in a home they own jointly and they have a casualty loss on the home, the $100 rule applies separately to each sister. State 1040 ez form 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. State 1040 ez form Apply this rule after you reduce each loss by $100. State 1040 ez form For more information, see the Form 4684 instructions. State 1040 ez form If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. State 1040 ez form Example. State 1040 ez form In June, you discovered that your house had been burglarized. State 1040 ez form Your loss after insurance reimbursement was $2,000. State 1040 ez form Your adjusted gross income for the year you discovered the theft is $29,500. State 1040 ez form Figure your theft loss as follows. State 1040 ez form 1. State 1040 ez form Loss after insurance $2,000 2. State 1040 ez form Subtract $100 100 3. State 1040 ez form Loss after $100 rule $1,900 4. State 1040 ez form Subtract 10% of $29,500 AGI $2,950 5. State 1040 ez form Theft loss deduction $-0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($2,950). State 1040 ez form More than one loss. State 1040 ez form   If you have more than one casualty or theft loss during your tax year, reduce each loss by any reimbursement and by $100. State 1040 ez form Then you must reduce the total of all your losses by 10% of your adjusted gross income. State 1040 ez form Example. State 1040 ez form In March, you had a car accident that totally destroyed your car. State 1040 ez form You did not have collision insurance on your car, so you did not receive any insurance reimbursement. State 1040 ez form Your loss on the car was $1,800. State 1040 ez form In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items you had stored there. State 1040 ez form Your loss on the basement items after reimbursement was $2,100. State 1040 ez form Your adjusted gross income for the year that the accident and fire occurred is $25,000. State 1040 ez form You figure your casualty loss deduction as follows. State 1040 ez form     Car Basement 1. State 1040 ez form Loss $1,800 $2,100 2. State 1040 ez form Subtract $100 per incident 100 100 3. State 1040 ez form Loss after $100 rule $1,700 $2,000 4. State 1040 ez form Total loss $3,700 5. State 1040 ez form Subtract 10% of $25,000 AGI 2,500 6. State 1040 ez form Casualty loss deduction $1,200 Married taxpayers. State 1040 ez form   If you and your spouse file a joint return, you are treated as one individual in applying the 10% rule. State 1040 ez form It does not matter if you own the property jointly or separately. State 1040 ez form   If you file separate returns, the 10% rule applies to each return on which a loss is claimed. State 1040 ez form More than one owner. State 1040 ez form   If two or more individuals (other than husband and wife filing a joint return) have a loss on property that is owned jointly, the 10% rule applies separately to each. State 1040 ez form Gains and losses. State 1040 ez form   If you have casualty or theft gains as well as losses to personal-use property, you must compare your total gains to your total losses. State 1040 ez form 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. State 1040 ez form Casualty or theft gains do not include gains you choose to postpone. State 1040 ez form See Postponement of Gain, later. State 1040 ez form Losses more than gains. State 1040 ez form   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. State 1040 ez form The rest, if any, is your deductible loss from personal-use property. State 1040 ez form Example. State 1040 ez form Your theft loss after reducing it by reimbursements and by $100 is $2,700. State 1040 ez form Your casualty gain is $700. State 1040 ez form Your loss is more than your gain, so you must reduce your $2,000 net loss ($2,700 − $700) by 10% of your adjusted gross income. State 1040 ez form Gains more than losses. State 1040 ez form   If your recognized gains are more than your losses, subtract your losses from your gains. State 1040 ez form The difference is treated as a capital gain and must be reported on Schedule D (Form 1040). State 1040 ez form The 10% rule does not apply to your gains. State 1040 ez form Example. State 1040 ez form Your theft loss is $600 after reducing it by reimbursements and by $100. State 1040 ez form Your casualty gain is $1,600. State 1040 ez form Because your gain is more than your loss, you must report the $1,000 net gain ($1,600 − $600) on Schedule D (Form 1040). State 1040 ez form More information. State 1040 ez form   For information on how to figure recognized gains, see Figuring a Gain , later. State 1040 ez form Figuring the Deduction Generally, you must figure your loss separately for each item stolen, damaged, or destroyed. State 1040 ez form However, a special rule applies to real property you own for personal use. State 1040 ez form Real property. State 1040 ez form   In figuring a loss to real estate you own for personal use, all improvements (such as buildings and ornamental trees and the land containing the improvements) are considered together. State 1040 ez form Example 1. State 1040 ez form In June, a fire destroyed your lakeside cottage, which cost $144,800 (including $14,500 for the land) several years ago. State 1040 ez form (Your land was not damaged. State 1040 ez form ) This was your only casualty or theft loss for the year. State 1040 ez form The FMV of the property immediately before the fire was $180,000 ($145,000 for the cottage and $35,000 for the land). State 1040 ez form The FMV immediately after the fire was $35,000 (value of the land). State 1040 ez form You collected $130,000 from the insurance company. State 1040 ez form Your adjusted gross income for the year the fire occurred is $80,000. State 1040 ez form Your deduction for the casualty loss is $6,700, figured in the following manner. State 1040 ez form 1. State 1040 ez form Adjusted basis of the entire property (cost in this example) $144,800 2. State 1040 ez form FMV of entire property  before fire $180,000 3. State 1040 ez form FMV of entire property after fire 35,000 4. State 1040 ez form Decrease in FMV of entire property (line 2 − line 3) $145,000 5. State 1040 ez form Loss (smaller of line 1 or line 4) $144,800 6. State 1040 ez form Subtract insurance 130,000 7. State 1040 ez form Loss after reimbursement $14,800 8. State 1040 ez form Subtract $100 100 9. State 1040 ez form Loss after $100 rule $14,700 10. State 1040 ez form Subtract 10% of $80,000 AGI 8,000 11. State 1040 ez form Casualty loss deduction $ 6,700 Example 2. State 1040 ez form You bought your home a few years ago. State 1040 ez form You paid $150,000 ($10,000 for the land and $140,000 for the house). State 1040 ez form You also spent an additional $2,000 for landscaping. State 1040 ez form This year a fire destroyed your home. State 1040 ez form The fire also damaged the shrubbery and trees in your yard. State 1040 ez form The fire was your only casualty or theft loss this year. State 1040 ez form Competent appraisers valued the property as a whole at $175,000 before the fire, but only $50,000 after the fire. State 1040 ez form Shortly after the fire, the insurance company paid you $95,000 for the loss. State 1040 ez form Your adjusted gross income for this year is $70,000. State 1040 ez form You figure your casualty loss deduction as follows. State 1040 ez form 1. State 1040 ez form Adjusted basis of the entire property (cost of land, building, and landscaping) $152,000 2. State 1040 ez form FMV of entire property  before fire $175,000 3. State 1040 ez form FMV of entire property after fire 50,000 4. State 1040 ez form Decrease in FMV of entire property (line 2 − line 3) $125,000 5. State 1040 ez form Loss (smaller of line 1 or line 4) $125,000 6. State 1040 ez form Subtract insurance 95,000 7. State 1040 ez form Loss after reimbursement $30,000 8. State 1040 ez form Subtract $100 100 9. State 1040 ez form Loss after $100 rule $29,900 10. State 1040 ez form Subtract 10% of $70,000 AGI 7,000 11. State 1040 ez form Casualty loss deduction $ 22,900 Personal property. State 1040 ez form   Personal property is any property that is not real property. State 1040 ez form 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. State 1040 ez form Then combine these separate losses to figure the total loss. State 1040 ez form Reduce the total loss by $100 and 10% of your adjusted gross income to figure the loss deduction. State 1040 ez form Example 1. State 1040 ez form In August, a storm destroyed your pleasure boat, which cost $18,500. State 1040 ez form This was your only casualty or theft loss for the year. State 1040 ez form Its FMV immediately before the storm was $17,000. State 1040 ez form You had no insurance, but were able to salvage the motor of the boat and sell it for $200. State 1040 ez form Your adjusted gross income for the year the casualty occurred is $70,000. State 1040 ez form Although the motor was sold separately, it is part of the boat and not a separate item of property. State 1040 ez form You figure your casualty loss deduction as follows. State 1040 ez form 1. State 1040 ez form Adjusted basis (cost in this example) $18,500 2. State 1040 ez form FMV before storm $17,000 3. State 1040 ez form FMV after storm 200 4. State 1040 ez form Decrease in FMV  (line 2 − line 3) $16,800 5. State 1040 ez form Loss (smaller of line 1 or line 4) $16,800 6. State 1040 ez form Subtract insurance -0- 7. State 1040 ez form Loss after reimbursement $16,800 8. State 1040 ez form Subtract $100 100 9. State 1040 ez form Loss after $100 rule $16,700 10. State 1040 ez form Subtract 10% of $70,000 AGI 7,000 11. State 1040 ez form Casualty loss deduction $ 9,700 Example 2. State 1040 ez form In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. State 1040 ez form You had bought the car for $30,000. State 1040 ez form The FMV of the car just before the accident was $17,500. State 1040 ez form Its FMV just after the accident was $180 (scrap value). State 1040 ez form Your insurance company reimbursed you $16,000. State 1040 ez form Your watch was not insured. State 1040 ez form You had purchased it for $250. State 1040 ez form Its FMV just before the accident was $500. State 1040 ez form Your adjusted gross income for the year the accident occurred is $97,000. State 1040 ez form Your casualty loss deduction is zero, figured as follows. State 1040 ez form     Car Watch 1. State 1040 ez form Adjusted basis (cost) $30,000 $250 2. State 1040 ez form FMV before accident $17,500 $500 3. State 1040 ez form FMV after accident 180 -0- 4. State 1040 ez form Decrease in FMV (line 2 − line 3) $17,320 $500 5. State 1040 ez form Loss (smaller of line 1 or line 4) $17,320 $250 6. State 1040 ez form Subtract insurance 16,000 -0- 7. State 1040 ez form Loss after reimbursement $1,320 $250 8. State 1040 ez form Total loss $1,570 9. State 1040 ez form Subtract $100 100 10. State 1040 ez form Loss after $100 rule $1,470 11. State 1040 ez form Subtract 10% of $97,000 AGI 9,700 12. State 1040 ez form Casualty loss deduction $ -0- Both real and personal properties. State 1040 ez form   When a casualty involves both real and personal properties, you must figure the loss separately for each type of property. State 1040 ez form However, you apply a single $100 reduction to the total loss. State 1040 ez form Then, you apply the 10% rule to figure the casualty loss deduction. State 1040 ez form Example. State 1040 ez form In July, a hurricane damaged your home, which cost you $164,000 including land. State 1040 ez form The FMV of the property (both building and land) immediately before the storm was $170,000 and its FMV immediately after the storm was $100,000. State 1040 ez form Your household furnishings were also damaged. State 1040 ez form You separately figured the loss on each damaged household item and arrived at a total loss of $600. State 1040 ez form You collected $50,000 from the insurance company for the damage to your home, but your household furnishings were not insured. State 1040 ez form Your adjusted gross income for the year the hurricane occurred is $65,000. State 1040 ez form You figure your casualty loss deduction from the hurricane in the following manner. State 1040 ez form 1. State 1040 ez form Adjusted basis of real property (cost in this example) $164,000 2. State 1040 ez form FMV of real property before hurricane $170,000 3. State 1040 ez form FMV of real property after hurricane 100,000 4. State 1040 ez form Decrease in FMV of real property (line 2 − line 3) $70,000 5. State 1040 ez form Loss on real property (smaller of line 1 or line 4) $70,000 6. State 1040 ez form Subtract insurance 50,000 7. State 1040 ez form Loss on real property after reimbursement $20,000 8. State 1040 ez form Loss on furnishings $600 9. State 1040 ez form Subtract insurance -0- 10. State 1040 ez form Loss on furnishings after reimbursement $600 11. State 1040 ez form Total loss (line 7 plus line 10) $20,600 12. State 1040 ez form Subtract $100 100 13. State 1040 ez form Loss after $100 rule $20,500 14. State 1040 ez form Subtract 10% of $65,000 AGI 6,500 15. State 1040 ez form Casualty loss deduction $14,000 Property used partly for business and partly for personal purposes. State 1040 ez form   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 portion and for the business or income-producing portion. State 1040 ez form You must figure each loss separately because the losses attributed to these two uses are figured in two different ways. State 1040 ez form When figuring each loss, allocate the total cost or basis, the FMV before and after the casualty or theft loss, and the insurance or other reimbursement between the business and personal use of the property. State 1040 ez form The $100 rule and the 10% rule apply only to the casualty or theft loss on the personal-use portion of the property. State 1040 ez form Example. State 1040 ez form You own a building that you constructed on leased land. State 1040 ez form You use half of the building for your business and you live in the other half. State 1040 ez form The cost of the building was $400,000. State 1040 ez form You made no further improvements or additions to it. State 1040 ez form A flood in March damaged the entire building. State 1040 ez form The FMV of the building was $380,000 immediately before the flood and $320,000 afterwards. State 1040 ez form Your insurance company reimbursed you $40,000 for the flood damage. State 1040 ez form Depreciation on the business part of the building before the flood totaled $24,000. State 1040 ez form Your adjusted gross income for the year the flood occurred is $125,000. State 1040 ez form You have a deductible business casualty loss of $10,000. State 1040 ez form You do not have a deductible personal casualty loss because of the 10% rule. State 1040 ez form You figure your loss as follows. State 1040 ez form     Business   Personal     Part   Part 1. State 1040 ez form Cost (total $400,000) $200,000   $200,000 2. State 1040 ez form Subtract depreciation 24,000   -0- 3. State 1040 ez form Adjusted basis $176,000   $200,000 4. State 1040 ez form FMV before flood (total $380,000) $190,000   $190,000 5. State 1040 ez form FMV after flood (total $320,000) 160,000   160,000 6. State 1040 ez form Decrease in FMV  (line 4 − line 5) $30,000   $30,000 7. State 1040 ez form Loss (smaller of line 3 or line 6) $30,000   $30,000 8. State 1040 ez form Subtract insurance 20,000   20,000 9. State 1040 ez form Loss after reimbursement $10,000   $10,000 10. State 1040 ez form Subtract $100 on personal-use property -0-   100 11. State 1040 ez form Loss after $100 rule $10,000   $9,900 12. State 1040 ez form Subtract 10% of $125,000 AGI on personal-use property -0-   12,500 13. State 1040 ez form Deductible business loss $10,000     14. State 1040 ez form Deductible personal loss $-0- Figuring a Gain If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. State 1040 ez form Your gain is figured as follows. State 1040 ez form The amount you receive (discussed next), minus Your adjusted basis in the property at the time of the casualty or theft. State 1040 ez form See Adjusted Basis , earlier, for information on adjusted basis. State 1040 ez form Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. State 1040 ez form Amount you receive. State 1040 ez form   The amount you receive includes any money plus the value of any property you receive minus any expenses you have in obtaining reimbursement. State 1040 ez form It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. State 1040 ez form Example. State 1040 ez form A hurricane destroyed your personal residence and the insurance company awarded you $145,000. State 1040 ez form You received $140,000 in cash. State 1040 ez form The remaining $5,000 was paid directly to the holder of a mortgage on the property. State 1040 ez form The amount you received includes the $5,000 reimbursement paid on the mortgage. State 1040 ez form Main home destroyed. State 1040 ez form   If you have a gain because your main home was destroyed, you generally can exclude the gain from your income as if you had sold or exchanged your home. State 1040 ez form You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). State 1040 ez form To exclude a gain, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date it was destroyed. State 1040 ez form For information on this exclusion, see Publication 523. State 1040 ez form If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. State 1040 ez form See Postponement of Gain , later. State 1040 ez form Reporting a gain. State 1040 ez form   You generally must report your gain as income in the year you receive the reimbursement. State 1040 ez form However, you do not have to report your gain if you meet certain requirements and choose to postpone reporting the gain according to the rules explained under Postponement of Gain, next. State 1040 ez form   For information on how to report a gain, see How To Report Gains and Losses , later. State 1040 ez form    If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, do not consider the gain you are postponing when figuring your casualty or theft loss deduction. State 1040 ez form See 10% Rule under Deduction Limits, earlier. State 1040 ez form Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. State 1040 ez form Your basis in the new property is generally the same as your adjusted basis in the property it replaces. State 1040 ez form You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. State 1040 ez form However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. State 1040 ez form You also can choose to postpone reporting the gain if you purchase a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the property. State 1040 ez form See Controlling interest in a corporation , later. State 1040 ez form If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. State 1040 ez form To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. State 1040 ez form If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. State 1040 ez form Example. State 1040 ez form In 1970, you bought an oceanfront cottage for your personal use at a cost of $18,000. State 1040 ez form You made no further improvements or additions to it. State 1040 ez form When a storm destroyed the cottage this January, the cottage was worth $250,000. State 1040 ez form You received $146,000 from the insurance company in March. State 1040 ez form You had a gain of $128,000 ($146,000 − $18,000). State 1040 ez form You spent $144,000 to rebuild the cottage. State 1040 ez form Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. State 1040 ez form Buying replacement property from a related person. State 1040 ez form   You cannot postpone reporting a gain from a casualty or theft if you buy the replacement property from a related person (discussed later). State 1040 ez form This rule applies to the following taxpayers. State 1040 ez form C corporations. State 1040 ez form Partnerships in which more than 50% of the capital or profits interests is owned by C corporations. State 1040 ez form All others (including individuals, partnerships — other than those in (2) — and S corporations) if the total realized gain for the tax year on all destroyed or stolen properties on which there are realized gains is more than $100,000. State 1040 ez form For casualties and thefts described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. State 1040 ez form If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. State 1040 ez form If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. State 1040 ez form Exception. State 1040 ez form   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the destroyed or stolen property. State 1040 ez form Related persons. State 1040 ez form   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. State 1040 ez form For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. State 1040 ez form Death of a taxpayer. State 1040 ez form   If a taxpayer dies after having a gain but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. State 1040 ez form The executor of the estate or the person succeeding to the funds from the casualty or theft cannot postpone reporting the gain by buying replacement property. State 1040 ez form Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. State 1040 ez form Property you acquire as a gift or inheritance does not qualify. State 1040 ez form You do not have to use the same funds you receive as