Kansas and Midwestern disaster areas.(p1)
The following paragraphs explain the special rules that apply to casualties and thefts of taxpayers in both the Kansas disaster area (defined below) who were affected by storms and tornadoes that began on May 4, 2007, and Midwestern disaster areas (defined below). In addition, you may be entitled to other tax benefits not covered in this publication. For more information, see Publication 4492-A, Information for Taxpayers Affected by the May 4, 2007, Kansas Storms and Tornadoes or Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.
Losses of personal use property that arose in these disaster areas are not subject to the $100 or 10% of adjusted gross income limitations. Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes. If you live in the Kansas disaster area and deducted your loss in 2007 or elected to deduct the loss in 2006, do not use the 2008 Form 4684 to claim that loss. Instead, see Publication 4492-A for special instructions on how to complete your tax forms. If you live in a Midwestern disaster area and you elect to deduct the loss in 2007, see Publication 4492-B for special instructions on how to complete your tax forms.
The replacement period for property in these disaster areas that was damaged, destroyed or stolen has been extended from 2 to 5 years. For more information, see Replacement Period
The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa, Leavenworth, Lyon, McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford.
For purposes of the special rules discussed above, a Midwestern disaster area
is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. For a list of counties in Midwestern disaster areas, see Table 4. Midwestern Disaster Areas
The term "applicable disaster date" as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas.taxmap/pubs/p547-000.htm#en_us_publink100081174
Federally declared disasters.(p2)
New rules apply to losses of personal use property attributable to federally declared disasters declared in tax years beginning after 2007 and that occurred before 2010. For more information, see Disaster Area Losses
Special rules for individuals impacted by Hurricanes Katrina, Rita, and Wilma.(p2)
If you claimed a casualty or theft loss deduction and in a later year you received more reimbursement than you expected, you do not recompute the tax for the year in which you claimed the deduction. Instead, you must include the reimbursement in your income for the year in which it was received, but only to the extent the original deduction reduced your tax for the earlier year. However, an exception applies if you claimed a casualty or theft loss deduction for damage to or destruction of your main home caused by Hurricane Katrina, Rita, or Wilma, and in a later year you received a hurricane relief grant. Under this exception, you can choose to file an amended income tax return (Form 1040X) for the tax year in which you claimed the deduction and reduce (but not below zero) the amount of the deduction by the amount of the grant.taxmap/pubs/p547-000.htm#en_us_publink1000109902
Personal casualty and theft loss limit.(p2)
Generally, a personal casualty or theft loss must exceed $500 to be allowed for 2009. This is in addition to the 10% of AGI limit that generally applies to the net loss.taxmap/pubs/p547-000.htm#en_us_publink100022568
Photographs of missing children.(p2)
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
This publication explains the tax treatment of casualties, thefts, and losses on deposits. A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident, or similar event. A theft occurs when someone steals your property. A loss on deposits occurs when your financial institution becomes insolvent or bankrupt.
This publication discusses the following topics.
- Definitions of a casualty, theft, and loss on deposits.
- How to figure the amount of your gain or loss.
- How to treat insurance and other reimbursements you receive.
- The deduction limits.
- When and how to report a casualty or theft.
- The special rules for disaster area losses.
When you have a casualty or theft, you have to file Form 4684. You will also have to file one or more of the following forms.
- Schedule A (Form 1040).
- Schedule D (Form 1040).
- Form 4797.
For details on which form to use, see How To Report Gains and Losses,
For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544. taxmap/pubs/p547-000.htm#en_us_publink100022571
Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. It includes schedules to help you figure the loss on your home and its contents, and your motor vehicles.
Publication 584-B is available to help you make a list of your stolen or damaged business or income-producing property and figure your loss.taxmap/pubs/p547-000.htm#en_us_publink100049200
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at *email@example.com
. (The asterisk must be included in the address.) Please put "Publications Comment" on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.
to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
If you have a tax question, check the information available on www.irs.gov
or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.
You may want to see:
Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 551 Basis of Assets 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and
Theft Loss Workbook
Form (and Instructions) Schedule A (Form 1040): Itemized Deductions Schedule D (Form 1040): Capital Gains and Losses 4684: Casualties and Thefts 4797: Sales of Business Property taxmap/pubs/p547-000.htm#en_us_publink100022575
See How To Get Tax Help
near the end of this publication for information about getting publications and forms.
A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.
- A sudden event is one that is swift, not gradual or progressive.
- An unexpected event is one that is ordinarily unanticipated and unintended.
- 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.
Deductible casualty losses can result from a number of different causes, including the following.
- Car accidents (but see Nondeductible losses, next, for exceptions).
- Fires (but see Nondeductible losses, next, for exceptions).
- Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, later.
- Mine cave-ins.
- Sonic booms.
- Storms, including hurricanes and tornadoes.
- Terrorist attacks.
- Volcanic eruptions.
A casualty loss is not deductible if the damage or destruction is caused by the following.
- Accidentally breaking articles such as glassware or china under normal conditions.
- A family pet (explained below).
- A fire if you willfully set it, or pay someone else to set it.
- A car accident if your willful negligence or willful act caused it. The same is true if the willful act or willful negligence of someone acting for you caused the accident.
- Progressive deterioration (explained below).
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.taxmap/pubs/p547-000.htm#en_us_publink100022579
Your antique oriental rug was damaged by your new puppy before it was housebroken. Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. taxmap/pubs/p547-000.htm#en_us_publink100022580
Loss of property due to progressive deterioration is not deductible as a casualty loss. This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. The following are examples of damage due to progressive deterioration.
- The steady weakening of a building due to normal wind and weather conditions.
- The deterioration and damage to a water heater that bursts. However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty.
- Most losses of property caused by droughts. To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit.
- Termite or moth damage.
- The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss.