• Home
  • Get A Quote
  • Customer Service
  • Claims
  • Report Your Claim
  • Carrier Contact
  • Pay
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
Call Us Call or Email Us Today
Client Center Login
  • Home
  • Quote
  • Coverages
    • Automobile
    • Business & Commercial
    • Flood
    • Health
    • Homeowners
    • Life
    • Renters
    • Umbrella
    • Watercraft & Boat
    • Windstorm
  • Service
    • Customer Service Portal
    • Customer Service Forms
  • Claim
    • Claim Information
    • Report a claim to the agency
    • Report a claim to the carrier
    • What to do after an accident
    • What to do if there's a fire
    • What to do if there's a flood
    • What to do to after a loss to your home
    • Prepare for hurricane season
    • Water Damage -Act quickly
    • what to do a power outage
  • Pay
  • Resources
    • Employment Center
    • Blog
    • Important Links
    • Secure Area
    • Insurance Glossary
    • Join Our Newsletter
    • Insurance Carrier Contacts
    • First Home Insurance checklist
    • Video Tips
  • About Us
    • About Us
    • Employee Directory
    • Testimonials
    • Location Map
    • Refer a Friend
    • Privacy Policy
  • Contact
Homeowners Insurance HOME Read More
Auto Insurance AUTO Read More
Renters Insurance RENTERS Read More
Business Insurance BUSINESS Read More
Life Insurance LIFE Read More
Watercraft Insurance WATERCRAFT Read More
Home > Blog > Tax Considerations for Casualty Loss
WEDNESDAY, FEBRUARY 12, 2014

Tax Considerations for Casualty Loss


independent insurance agency

Casualty and theft losses are the unexpected loss of property. Casualty and theft losses are deductible as an itemized deduction.
Please contact your accountant to discuss your individual circumstances.

A casualty occurs when your property is damaged as the result of an identifiable event that is sudden, unexpected, and unusual.

  • A sudden event is swift, not gradual or progressive.
  • An unexpected event is unanticipated and unintended.
  • An unusual event is not a normal day-to-day occurrence and is not typical of the types of activities in which you engage.

A theft occurs when property is taken or removed with the intent to deprive you of it.  A theft is not mislaid or lost property.

Insurance Coverage

If the property is covered by insurance, you must file a claim for reimbursement of the loss.

If the property is covered and you do not file a claim, you cannot deduct a casualty or theft loss for the property. The portion of the property not covered by insurance is eligible to be claimed for a deduction.

The amount of insurance deductible you must pay to receive reimbursement is part of the total casualty or theft loss.

Amount of Loss

To determine the amount of loss, you must know the fair market value (FMV) of the property before and after the loss and your adjusted basis in the property. Fair market value can be determined by the amount for which you could sell the property in its present condition. Adjusted basis is usually what the item cost, increased or decreased by events such as improvements, deterioration, or depreciation.

The amount of the loss is the lesser of the decrease in FMV as the result of the casualty or your adjusted basis in the property before the casualty or theft.

You must reduce the amount of loss by any reimbursement you receive, or expect to receive. Reimbursements include insurance recovery.

Once the amount of loss is determined, the loss must be further reduced by $100 if the property is personal. The $100 reduction for personal property applies to each casualty or theft during the year, regardless of how many items are involved in each incident.

After the $100 reduction, you must further reduce the amount of loss by 10% of your adjusted gross income (AGI). The balance remaining after these two reductions is the deductible amount of your loss.

For more information, please refer to IRS Topic 515 - Casualty, Disaster, and Theft Losses.

http://www.irs.gov/pub/irs-pdf/p547.pdf

Posted 2:31 PM

Tags: tax considerations for casualty losses, houston insurance, independent insurance agency
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012

  • houston insurance(432)
  • houston home insurance(353)
  • home insurance(328)
  • auto insurance(225)
  • houston auto insurance(212)
  • independent insurance agent(207)
  • katy home insurance(184)
  • insurance(169)
  • renters insurance(138)
  • cypress home insurance(121)
  • woodlands home insurance(109)
  • flood insurance(108)
  • spring home insurance(107)
  • katy auto insurance(103)
  • katy insurance(91)
  • independent insurance(87)
  • independent insurance agency(70)
  • houston flood insurance(55)
  • spring auto insurance(55)
  • cypress insurance(49)
  • woodlands auto insurance(47)
  • home insurance houston(42)
  • insurance agent(40)
  • woodlands insurance(39)
  • best insurance(37)
  • home insurance agent(33)
  • spring insurance(32)
  • life insurance(28)
  • cypress auto insurance(26)
  • home insurance katy(25)
  • houston renters insurance(25)
  • home insurance woodlands(24)
  • business insurance(23)
  • auto insurance agent(22)
  • springwoods village insurance(19)
  • magnolia home insurance(18)
  • home insurance spring(18)
  • umbrella insurance(18)
  • water damage(17)
  • jewelry insurance(16)
  • auto insurance houston(15)
  • health insurance(15)
  • liability insurance(14)
  • best insurance agent(14)
  • identity theft(13)
  • boat insurance(13)
  • hurricane season(12)
  • katy flood insurance(11)
  • windstorm insurance(10)
  • homeowners insurance(10)

View Mobile Version
Facebook
Twitter
LinkedIn
Blog
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Facebook Logo

Resources

Home About Us Get a Quote Customer Service Refer A Friend Contact Us

Contact Us

  • 11999 Katy Freeway Suite 635
  • Houston TX 77079
  • P: 281-558-2210
  • Email Us
© Copyright. All rights reserved.
Powered by Insurance Website Builder