Casualty and Theft Losses(p2)

The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area.

Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100 or 10% of adjusted gross income limits. Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes.

Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. However, the Kansas disaster area is a Presidentially declared disaster. Therefore, you could have elected to deduct losses from these storms and tornadoes on your tax return for the previous year. The deadline for making this election has expired.

The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to deduct the loss in 2006.

Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses that were attributable to the storms and tornadoes should enter "Kansas Disaster Area" at the top of Form 1040 or 1040X. They must also complete and attach the 2006 version of Form 4684 for either year and enter "Kansas Disaster Area" on the top and on the dotted line next to line 11 and enter -0- on line 11. Individuals filing or amending their 2007 tax return should cross out "2006" and enter "2007" at the top of Form 4684. They must also enter the amount from line 21 of that form on line 20 of Schedule A (Form 1040).