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File amended tax return 2011 online Publication 584 - Main Content Table of Contents LossesCost or other basis. File amended tax return 2011 online Fair market value. File amended tax return 2011 online Exception for personal-use real property. File amended tax return 2011 online More information. File amended tax return 2011 online Comments and SuggestionsOrdering forms and publications. File amended tax return 2011 online Tax questions. File amended tax return 2011 online How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). File amended tax return 2011 online Losses Generally, you may deduct losses to your home, household goods, and motor vehicles on your federal income tax return. File amended tax return 2011 online However, you may not deduct a casualty or theft loss that is covered by insurance unless you filed a timely insurance claim for reimbursement. File amended tax return 2011 online Any reimbursement you receive will reduce the loss. File amended tax return 2011 online If you did not file an insurance claim, you may deduct only the part of the loss that was not covered by insurance. File amended tax return 2011 online Amount of loss. File amended tax return 2011 online   You figure the amount of your loss using the following steps. File amended tax return 2011 online Determine your cost or other basis in the property before the casualty or theft. File amended tax return 2011 online Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. File amended tax return 2011 online (The decrease in FMV is the difference between the property's value immediately before and immediately after the casualty or theft. File amended tax return 2011 online ) From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. File amended tax return 2011 online Apply the deduction limits, discussed later, to determine the amount of your deductible loss. File amended tax return 2011 online Cost or other basis. File amended tax return 2011 online   Cost or other basis usually means original cost plus improvements. File amended tax return 2011 online If you did not acquire the property by purchasing it, your basis is determined as discussed in Publication 551, Basis of Assets. File amended tax return 2011 online 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. File amended tax return 2011 online Fair market value. File amended tax return 2011 online   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. File amended tax return 2011 online When filling out Schedules 1 through 20, you need to know the FMV of the property immediately before and immediately after the disaster, casualty, or theft. File amended tax return 2011 online Separate computations. File amended tax return 2011 online   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. File amended tax return 2011 online Then combine the losses to determine the total loss from that casualty or theft. File amended tax return 2011 online Exception for personal-use real property. File amended tax return 2011 online   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. File amended tax return 2011 online Figure the loss using the smaller of the following. File amended tax return 2011 online The decrease in FMV of the entire property. File amended tax return 2011 online The adjusted basis of the entire property. File amended tax return 2011 online Deduction limits. File amended tax return 2011 online   After you have figured the amount of your loss, as discussed earlier, you must figure how much of the loss you can deduct. File amended tax return 2011 online You do this on Form 4684, section A. File amended tax return 2011 online If the loss was to property for your personal use or your family's, there are two limits on the amount you can deduct for your casualty or theft loss. File amended tax return 2011 online You must reduce each casualty or theft loss by $100 ($100 rule). File amended tax return 2011 online You must further reduce the total of all your losses by 10% of your adjusted gross income (10% rule). File amended tax return 2011 online More information. File amended tax return 2011 online   For more information about the deduction limits, see Publication 547. File amended tax return 2011 online When your loss is deductible. File amended tax return 2011 online   You can generally deduct a casualty or disaster area loss only in the tax year in which the casualty or disaster occurred. File amended tax return 2011 online You can generally deduct a theft loss only in the year you discovered your property was stolen. File amended tax return 2011 online However, you can choose to deduct disaster area losses on your return for the year immediately before the year of the disaster if the President has declared your area a federal disaster area. File amended tax return 2011 online For details, see Disaster Area Losses in Publication 547. File amended tax return 2011 online Comments and Suggestions We welcome your comments about this publication and your suggestions for future editions. File amended tax return 2011 online You can write to us at the following address: Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. File amended tax return 2011 online NW, IR-6526 Washington, DC 20224 We respond to many letters by telephone. File amended tax return 2011 online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File amended tax return 2011 online You can email us at taxforms@irs. File amended tax return 2011 online gov. File amended tax return 2011 online Please put “Publications Comment” on the subject line. File amended tax return 2011 online You can also send us comments from www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/formspubs. File amended tax return 2011 online Select “Comment on Tax Forms and Publications” under “Information about. File amended tax return 2011 online ” Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File amended tax return 2011 online Ordering forms and publications. File amended tax return 2011 online   Visit www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/formspubs/ 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. File amended tax return 2011 online Internal Revenue Service 1201 N. File amended tax return 2011 online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File amended tax return 2011 online   If you have a tax question, check the information available on IRS. File amended tax return 2011 online gov or call 1-800-829-1040. File amended tax return 2011 online We cannot answer tax questions sent to either of the above addresses. File amended tax return 2011 online How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. File amended tax return 2011 online By selecting the method that is best for you, you will have quick and easy access to tax help. File amended tax return 2011 online Free help with your return. File amended tax return 2011 online   Free help in preparing your return is available nationwide from IRS-certified volunteers. File amended tax return 2011 online The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. File amended tax return 2011 online 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. File amended tax return 2011 online To find the nearest VITA or TCE site, visit IRS. File amended tax return 2011 online gov or call 1-800-906-9887 or 1-800-829-1040. File amended tax return 2011 online   As part of the TCE program, AARP offers the Tax-Aide counseling program. File amended tax return 2011 online To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. File amended tax return 2011 online aarp. File amended tax return 2011 online org/money/taxaide. File amended tax return 2011 online   For more information on these programs, go to IRS. File amended tax return 2011 online gov and enter keyword “VITA” in the upper right-hand corner. File amended tax return 2011 online Internet. File amended tax return 2011 online You can access the IRS website at IRS. File amended tax return 2011 online gov 24 hours a day, 7 days a week to: E-file your return. File amended tax return 2011 online Find out about commercial tax preparation and e-file services available free to eligible taxpayers. File amended tax return 2011 online Check the status of your 2011 refund. File amended tax return 2011 online Go to IRS. File amended tax return 2011 online gov and click on Where's My Refund. File amended tax return 2011 online Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. File amended tax return 2011 online If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). File amended tax return 2011 online Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File amended tax return 2011 online Download forms, including talking tax forms, instructions, and publications. File amended tax return 2011 online Order IRS products online. File amended tax return 2011 online Research your tax questions online. File amended tax return 2011 online Search publications online by topic or keyword. File amended tax return 2011 online Use the online Internal Revenue Code, regulations, or other official guidance. File amended tax return 2011 online View Internal Revenue Bulletins (IRBs) published in the last few years. File amended tax return 2011 online Figure your withholding allowances using the withholding calculator online at www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/individuals. File amended tax return 2011 online Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/individuals. File amended tax return 2011 online Sign up to receive local and national tax news by email. File amended tax return 2011 online Get information on starting and operating a small business. File amended tax return 2011 online Phone. File amended tax return 2011 online Many services are available by phone. File amended tax return 2011 online   Ordering forms, instructions, and publications. File amended tax return 2011 online Call 1-800-TAX -FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. File amended tax return 2011 online You should receive your order within 10 days. File amended tax return 2011 online Asking tax questions. File amended tax return 2011 online Call the IRS with your tax questions at 1-800-829-1040. File amended tax return 2011 online Solving problems. File amended tax return 2011 online You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. File amended tax return 2011 online An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. File amended tax return 2011 online Call your local Taxpayer Assistance Center for an appointment. File amended tax return 2011 online To find the number, go to www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File amended tax return 2011 online TTY/TDD equipment. File amended tax return 2011 online If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. File amended tax return 2011 online TeleTax topics. File amended tax return 2011 online Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. File amended tax return 2011 online Refund information. File amended tax return 2011 online To check the status of your 2011 refund, call 1-800-829-1954 or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). File amended tax return 2011 online Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. File amended tax return 2011 online If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). File amended tax return 2011 online Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File amended tax return 2011 online If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. File amended tax return 2011 online Other refund information. File amended tax return 2011 online To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. File amended tax return 2011 online Evaluating the quality of our telephone services. File amended tax return 2011 online To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. File amended tax return 2011 online One method is for a second IRS representative to listen in on or record random telephone calls. File amended tax return 2011 online Another is to ask some callers to complete a short survey at the end of the call. File amended tax return 2011 online Walk-in. File amended tax return 2011 online Many products and services are available on a walk-in basis. File amended tax return 2011 online   Products. File amended tax return 2011 online You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File amended tax return 2011 online Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. File amended tax return 2011 online Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. File amended tax return 2011 online Services. File amended tax return 2011 online You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. File amended tax return 2011 online An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. File amended tax return 2011 online 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 Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. File amended tax return 2011 online No appointment is necessary—just walk in. File amended tax return 2011 online If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. File amended tax return 2011 online A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. File amended tax return 2011 online If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. File amended tax return 2011 online All other issues will be handled without an appointment. File amended tax return 2011 online To find the number of your local office, go to  www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File amended tax return 2011 online Mail. File amended tax return 2011 online You can send your order for forms, instructions, and publications to the address below. File amended tax return 2011 online You should receive a response within 10 days after your request is received. File amended tax return 2011 online  Internal Revenue Service 1201 N. File amended tax return 2011 online Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. File amended tax return 2011 online   The Taxpayer Advocate Service (TAS) is your voice at the IRS. File amended tax return 2011 online Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. File amended tax return 2011 online We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. File amended tax return 2011 online Remember, the worst thing you can do is nothing at all. File amended tax return 2011 online   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. File amended tax return 2011 online You face (or your business is facing) an immediate threat of adverse action. File amended tax return 2011 online You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. File amended tax return 2011 online   If you qualify for our help, we’ll do everything we can to get your problem resolved. File amended tax return 2011 online You will be assigned to one advocate who will be with you at every turn. File amended tax return 2011 online We have offices in every state, the District of Columbia, and Puerto Rico. File amended tax return 2011 online Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. File amended tax return 2011 online And our services are always free. File amended tax return 2011 online   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. File amended tax return 2011 online Our tax toolkit at www. File amended tax return 2011 online TaxpayerAdvocate. File amended tax return 2011 online irs. File amended tax return 2011 online gov can help you understand these rights. File amended tax return 2011 online   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/advocate. File amended tax return 2011 online You can also call our toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059. File amended tax return 2011 online   TAS also handles large-scale or systemic problems that affect many taxpayers. File amended tax return 2011 online If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/advocate. File amended tax return 2011 online Low Income Taxpayer Clinics (LITCs). File amended tax return 2011 online   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. File amended tax return 2011 online Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. File amended tax return 2011 online These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. File amended tax return 2011 online Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. File amended tax return 2011 online For more information and to find a clinic near you, see the LITC page on www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. File amended tax return 2011 online This publication is also available by calling 1-800-829-3676 or at your local IRS office. File amended tax return 2011 online Free tax services. File amended tax return 2011 online   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. File amended tax return 2011 online Learn about free tax information from the IRS, including publications, services, and education and assistance programs. File amended tax return 2011 online The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. File amended tax return 2011 online The majority of the information and services listed in this publication are available to you free of charge. File amended tax return 2011 online If there is a fee associated with a resource or service, it is listed in the publication. File amended tax return 2011 online   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. File amended tax return 2011 online DVD for tax products. File amended tax return 2011 online You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. File amended tax return 2011 online Prior-year forms, instructions, and publications. File amended tax return 2011 online Tax Map: an electronic research tool and finding aid. File amended tax return 2011 online Tax law frequently asked questions. File amended tax return 2011 online Tax Topics from the IRS telephone response system. File amended tax return 2011 online Internal Revenue Code—Title 26 of the U. File amended tax return 2011 online S. File amended tax return 2011 online Code. File amended tax return 2011 online Links to other Internet based Tax Research Materials. File amended tax return 2011 online Fill-in, print, and save features for most tax forms. File amended tax return 2011 online Internal Revenue Bulletins. File amended tax return 2011 online Toll-free and email technical support. File amended tax return 2011 online Two releases during the year. File amended tax return 2011 online  – The first release will ship the beginning of January 2012. File amended tax return 2011 online  – The final release will ship the beginning of March 2012. File amended tax return 2011 online Purchase the DVD from National Technical Information Service (NTIS) at www. File amended tax return 2011 online irs. File amended tax return 2011 online gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). File amended tax return 2011 online Prev  Up  Next   Home   More Online Publications
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2014 Refunds Ahead of Last Year

 

IR-2014-23, March 6, 2014

WASHINGTON — By the end of February, more than 48 million tax refunds had been issued the IRS today announced – an increase of 5.6 percent compared to the same time last year. As of Feb. 28, the average refund this year is $3,034, up 3 percent compared to the average refund amount for the same time last year. Almost 88 percent of refunds to date have been directly deposited into the accounts of taxpayers, saving them time and a trip to the bank.

The number of returns filed electronically is up slightly from the same time last year however, the number of taxpayers filing from home computers is up 7.5 percent.

At the end of the fourth week of the filing season, the IRS had received almost 40 percent of the returns it expects to receive during 2014.

 

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2014 FILING SEASON STATISTICS

Cumulative statistics comparing 3/01/13 and 2/28/14

Individual Income Tax Returns:

2013

2014

% Change

Total Receipts

58,044,000

58,883,000

1.4

Total Processed

51,778,000

57,410,000

10.9

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

53,612,000

54,942,000

2.5

Tax Professionals

30,466,000

30,053,000

-1.4

Self-prepared

23,146,000

24,889,000

7.5

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

180,140,998

165,204,642

-8.3

 

 

 

 

Total Refunds:

 

 

 

Number

45,862,000

48,429,000

5.6

Amount

$135.025

Billion

$146.918

Billion

8.8

Average refund

$2,944

$3,034

3.0

 

 

 

 

Direct Deposit Refunds:

 

 

 

Number

41,137,000

42,380,000

3.0

Amount

$126.032

Billion

$131.203

Billion

4.1

Average refund

$3,054

$3,096

1.1

 

Page Last Reviewed or Updated: 06-Mar-2014

The File Amended Tax Return 2011 Online

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