Frankenstorm: Post-Hurricane Accounting for Casualty Loss
Contributed by The Bonadio Group
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Personal use property casualty losses are deducted on Section A of Form 4684, Casualties and Thefts. Casualty losses of personal use property are deductible only to the extent that the amount of the loss from each separate casualty or theft is more than $100 and the total amount of all losses during the year is greater than 10 percent of your adjusted gross income.
A casualty loss is calculated as the lesser of:
- The adjusted basis in the property before the casualty; or
- The decrease in FMV of the property as a result of the casualty.
This amount is reduced by any insurance or other reimbursements received.
For more information on claiming the casualty loss deduction, check out:
- IRC §165 and Reg. Sec. 1.165-7
- IRS Publication 584, Casualty, Disaster, and Theft Loss Workbook