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Www free state taxes com 7. Www free state taxes com   How To Get Tax Help Table of Contents Outside the U. Www free state taxes com S. Www free state taxes com Low Income Taxpayer Clinics Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Www free state taxes com Free help with your tax return. Www free state taxes com   You can get free help preparing your return nationwide from IRS-certified volunteers. Www free state taxes com The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Www free state taxes com The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Www free state taxes com 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. Www free state taxes com In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Www free state taxes com To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Www free state taxes com gov, download the IRS2Go app, or call 1-800-906-9887. Www free state taxes com   As part of the TCE program, AARP offers the Tax-Aide counseling program. Www free state taxes com To find the nearest AARP Tax-Aide site, visit AARP's website at www. Www free state taxes com aarp. Www free state taxes com org/money/taxaide or call 1-888-227-7669. Www free state taxes com For more information on these programs, go to IRS. Www free state taxes com gov and enter “VITA” in the search box. Www free state taxes com Internet. Www free state taxes com    IRS. Www free state taxes com gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Www free state taxes com Download the free IRS2Go app from the iTunes app store or from Google Play. Www free state taxes com Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Www free state taxes com Check the status of your 2013 refund with the Where's My Refund? application on IRS. Www free state taxes com gov or download the IRS2Go app and select the Refund Status option. Www free state taxes com The IRS issues more than 9 out of 10 refunds in less than 21 days. Www free state taxes com Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Www free state taxes com You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Www free state taxes com The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Www free state taxes com Use the Interactive Tax Assistant (ITA) to research your tax questions. Www free state taxes com No need to wait on the phone or stand in line. Www free state taxes com The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Www free state taxes com When you reach the response screen, you can print the entire interview and the final response for your records. Www free state taxes com New subject areas are added on a regular basis. Www free state taxes com  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Www free state taxes com gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Www free state taxes com You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Www free state taxes com The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Www free state taxes com When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Www free state taxes com Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Www free state taxes com You can also ask the IRS to mail a return or an account transcript to you. Www free state taxes com Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Www free state taxes com gov or by calling 1-800-908-9946. Www free state taxes com Tax return and tax account transcripts are generally available for the current year and the past three years. Www free state taxes com Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Www free state taxes com Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Www free state taxes com If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Www free state taxes com Check the status of your amended return using Where's My Amended Return? Go to IRS. Www free state taxes com gov and enter Where's My Amended Return? in the search box. Www free state taxes com You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Www free state taxes com It can take up to 3 weeks from the date you mailed it to show up in our system. Www free state taxes com Make a payment using one of several safe and convenient electronic payment options available on IRS. Www free state taxes com gov. Www free state taxes com Select the Payment tab on the front page of IRS. Www free state taxes com gov for more information. Www free state taxes com Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Www free state taxes com Figure your income tax withholding with the IRS Withholding Calculator on IRS. Www free state taxes com gov. Www free state taxes com Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Www free state taxes com Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Www free state taxes com gov. Www free state taxes com Request an Electronic Filing PIN by going to IRS. Www free state taxes com gov and entering Electronic Filing PIN in the search box. Www free state taxes com Download forms, instructions and publications, including accessible versions for people with disabilities. Www free state taxes com Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Www free state taxes com gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Www free state taxes com An employee can answer questions about your tax account or help you set up a payment plan. Www free state taxes com Before you visit, check the Office Locator on IRS. Www free state taxes com gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Www free state taxes com If you have a special need, such as a disability, you can request an appointment. Www free state taxes com Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Www free state taxes com Apply for an Employer Identification Number (EIN). Www free state taxes com Go to IRS. Www free state taxes com gov and enter Apply for an EIN in the search box. Www free state taxes com Read the Internal Revenue Code, regulations, or other official guidance. Www free state taxes com Read Internal Revenue Bulletins. Www free state taxes com Sign up to receive local and national tax news and more by email. Www free state taxes com Just click on “subscriptions” above the search box on IRS. Www free state taxes com gov and choose from a variety of options. Www free state taxes com Phone. Www free state taxes com    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Www free state taxes com Download the free IRS2Go app from the iTunes app store or from Google Play. Www free state taxes com Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Www free state taxes com gov, or download the IRS2Go app. Www free state taxes com Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Www free state taxes com The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Www free state taxes com Most VITA and TCE sites offer free electronic filing. Www free state taxes com Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Www free state taxes com Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Www free state taxes com Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Www free state taxes com If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Www free state taxes com The IRS issues more than 9 out of 10 refunds in less than 21 days. Www free state taxes com Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Www free state taxes com Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Www free state taxes com The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Www free state taxes com Note, the above information is for our automated hotline. Www free state taxes com Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Www free state taxes com Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Www free state taxes com You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Www free state taxes com It can take up to 3 weeks from the date you mailed it to show up in our system. Www free state taxes com Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Www free state taxes com You should receive your order within 10 business days. Www free state taxes com Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Www free state taxes com If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Www free state taxes com Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Www free state taxes com The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Www free state taxes com These individuals can also contact the IRS through relay services such as the Federal Relay Service. Www free state taxes com    Outside the U. Www free state taxes com S. Www free state taxes com If you are outside the United States, taxpayer assistance is available by calling the following U. Www free state taxes com S Embassies or consulates. Www free state taxes com    Beijing, China (86) (10) 8531-3983 Frankfurt, Germany (49) (69) 7535-3823 London, England (44) (20) 7894-0477 Paris, France (33) (1) 4312-2555   If you cannot contact one of these offices, taxpayer assistance is also available at (267) 941-1000 (not a toll free call). Www free state taxes com   If you are in a U. Www free state taxes com S. Www free state taxes com territory (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and U. Www free state taxes com S. Www free state taxes com Virgin Islands) and have a tax question, you can call 1-800-829-1040. Www free state taxes com Walk-in. Www free state taxes com   You can find a selection of forms, publications and services — in-person. Www free state taxes com Products. Www free state taxes com You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Www free state taxes com Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Www free state taxes com Services. Www free state taxes com You can walk in to your local TAC for face-to-face tax help. Www free state taxes com An employee can answer questions about your tax account or help you set up a payment plan. Www free state taxes com Before visiting, use the Office Locator tool on IRS. Www free state taxes com gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Www free state taxes com    Outside the U. Www free state taxes com S. Www free state taxes com If you are outside the United States during the filing period (January to mid-June), you can get the necessary federal tax forms and publications from most U. Www free state taxes com S. Www free state taxes com Embassies and consulates. Www free state taxes com   Walk-in taxpayer assistance is available at the following U. Www free state taxes com S. Www free state taxes com Embassies or consulates. Www free state taxes com    Beijing, China (86) (10) 8531-3983 Frankfurt, Germany (49) (69) 7535-3811 London, England (44) (20) 7894-0477 Paris, France (33) (1) 4312-2555   Please contact the office for times when assistance will be available. Www free state taxes com Mail. Www free state taxes com   You can send your order for forms, instructions, and publications to the address below. Www free state taxes com You should receive a response within 10 business days after your request is received. Www free state taxes com Internal Revenue Service 1201 N. Www free state taxes com Mitsubishi Motorway Bloomington, IL 61705-6613      Outside the U. Www free state taxes com S. Www free state taxes com If you are outside the United States, you can get tax assistance by writing to the address below. Www free state taxes com  Internal Revenue Service International Accounts Philadelphia, PA 19255-0725 Taxpayer Advocate Service. Www free state taxes com   The Taxpayer Advocate Service Is Here to Help You. Www free state taxes com The Taxpayer Advocate Service (TAS) is your voice at the IRS. Www free state taxes com Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Www free state taxes com   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Www free state taxes com We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Www free state taxes com You face (or your business is facing) an immediate threat of adverse action. Www free state taxes com You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Www free state taxes com   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Www free state taxes com Here's why we can help: TAS is an independent organization within the IRS. Www free state taxes com Our advocates know how to work with the IRS. Www free state taxes com Our services are free and tailored to meet your needs. Www free state taxes com We have offices in every state, the District of Columbia, and Puerto Rico. Www free state taxes com   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Www free state taxes com  How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Www free state taxes com If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Www free state taxes com Outside the U. Www free state taxes com S. Www free state taxes com   If you live outside of the United States, you can call the Taxpayer Advocate at (787) 522-8601 in English or (787) 522-8600 in Spanish. Www free state taxes com You can contact the Taxpayer Advocate at: Internal Revenue Service Taxpayer Advocate Service City View Plaza, 48 Carr 165, Guaynabo, P. Www free state taxes com R. Www free state taxes com 00968-8000 Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Www free state taxes com Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Www free state taxes com Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Www free state taxes com Prev  Up  Next   Home   More Online Publications
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The Www Free State Taxes Com

Www free state taxes com 25. Www free state taxes com   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. Www free state taxes com Progressive deterioration. Www free state taxes com Damage from corrosive drywall. Www free state taxes com Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses What's New New Section C of Form 4684 for Ponzi-type investment schemes. Www free state taxes com  Section C of Form 4684 is new for 2013. Www free state taxes com You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. Www free state taxes com Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Www free state taxes com You do not need to complete Appendix A. Www free state taxes com For details, see Losses from Ponzi-type investment schemes , in this chapter. Www free state taxes com Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. Www free state taxes com The chapter also explains the following  topics. Www free state taxes com How to figure the amount of your loss. Www free state taxes com How to treat insurance and other reimbursements you receive. Www free state taxes com The deduction limits. Www free state taxes com When and how to report a casualty or theft. Www free state taxes com Forms to file. Www free state taxes com    When you have a casualty or theft, you have to file Form 4684. Www free state taxes com You will also have to file one or more of the following forms. Www free state taxes com Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. Www free state taxes com   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. Www free state taxes com Workbook for casualties and thefts. Www free state taxes com    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. Www free state taxes com It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. Www free state taxes com Business or investment-related losses. Www free state taxes com   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. Www free state taxes com Useful Items - You may want to see: Publication 544 Sales and Other Dispositions  of Assets 547 Casualties, Disasters, and   Thefts 584 Casualty, Disaster, and Theft   Loss Workbook (Personal-Use  Property) Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Www free state taxes com A sudden event is one that is swift, not gradual or progressive. Www free state taxes com An unexpected event is one that is ordinarily unanticipated and unintended. Www free state taxes com 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. Www free state taxes com Deductible losses. Www free state taxes com   Deductible casualty losses can result from a number of different causes, including the following. Www free state taxes com Car accidents (but see Nondeductible losses , next, for exceptions). Www free state taxes com Earthquakes. Www free state taxes com Fires (but see Nondeductible losses , next, for exceptions). Www free state taxes com Floods. Www free state taxes com Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses in Publication 547. Www free state taxes com Mine cave-ins. Www free state taxes com Shipwrecks. Www free state taxes com Sonic booms. Www free state taxes com Storms, including hurricanes and tornadoes. Www free state taxes com Terrorist attacks. Www free state taxes com Vandalism. Www free state taxes com Volcanic eruptions. Www free state taxes com Nondeductible losses. Www free state taxes com   A casualty loss is not deductible if the damage or destruction is caused by the following. Www free state taxes com Accidentally breaking articles such as glassware or china under normal conditions. Www free state taxes com A family pet (explained below). Www free state taxes com A fire if you willfully set it or pay someone else to set it. Www free state taxes com A car accident if your willful negligence or willful act caused it. Www free state taxes com The same is true if the willful act or willful negligence of someone acting for you caused the accident. Www free state taxes com Progressive deterioration (explained later). Www free state taxes com Family pet. Www free state taxes com   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. Www free state taxes com Example. Www free state taxes com Your antique oriental rug was damaged by your new puppy before it was housebroken. Www free state taxes com Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. Www free state taxes com Progressive deterioration. Www free state taxes com    Loss of property due to progressive deterioration is not deductible as a casualty loss. Www free state taxes com This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Www free state taxes com The following are examples of damage due to progressive deterioration. Www free state taxes com The steady weakening of a building due to normal wind and weather conditions. Www free state taxes com The deterioration and damage to a water heater that bursts. Www free state taxes com However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. Www free state taxes com Most losses of property caused by droughts. Www free state taxes com To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. Www free state taxes com Termite or moth damage. Www free state taxes com The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. Www free state taxes com However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. Www free state taxes com Damage from corrosive drywall. Www free state taxes com   Under a special procedure, you may be able to claim a casualty loss deduction for amounts you paid to repair damage to your home and household appliances that resulted from corrosive drywall. Www free state taxes com For details, see Publication 547. Www free state taxes com Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. Www free state taxes com The taking of property must be illegal under the laws of the state where it occurred and it must have been done with criminal intent. Www free state taxes com You do not need to show a conviction for theft. Www free state taxes com Theft includes the taking of money or property by the following means. Www free state taxes com Blackmail. Www free state taxes com Burglary. Www free state taxes com Embezzlement. Www free state taxes com Extortion. Www free state taxes com Kidnapping for ransom. Www free state taxes com Larceny. Www free state taxes com Robbery. Www free state taxes com The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Www free state taxes com Decline in market value of stock. Www free state taxes com   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. Www free state taxes com 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. Www free state taxes com You report a capital loss on Schedule D (Form 1040). Www free state taxes com For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Www free state taxes com Mislaid or lost property. Www free state taxes com   The simple disappearance of money or property is not a theft. Www free state taxes com 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. Www free state taxes com Sudden, unexpected, and unusual events are defined earlier. Www free state taxes com Example. Www free state taxes com A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Www free state taxes com The diamond falls from the ring and is never found. Www free state taxes com The loss of the diamond is a casualty. Www free state taxes com Losses from Ponzi-type investment schemes. Www free state taxes com   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. Www free state taxes com R. Www free state taxes com B. Www free state taxes com 735 (available at www. Www free state taxes com irs. Www free state taxes com gov/irb/2009-14_IRB/ar07. Www free state taxes com html). Www free state taxes com Revenue Procedure 2009-20, 2009-14 I. Www free state taxes com R. Www free state taxes com B. Www free state taxes com 749 (available at www. Www free state taxes com irs. Www free state taxes com gov/irb/2009-14_IRB/ar11. Www free state taxes com html). Www free state taxes com Revenue Procedure 2011-58, 2011-50 I. Www free state taxes com R. Www free state taxes com B. Www free state taxes com 849 (available at www. Www free state taxes com irs. Www free state taxes com gov/irb/2011-50_IRB/ar11. Www free state taxes com html). Www free state taxes com 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. Www free state taxes com Skip lines 19 to 27. Www free state taxes com Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Www free state taxes com You do not need to complete Appendix A. Www free state taxes com For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. Www free state taxes com   If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. Www free state taxes com Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Www free state taxes com If you incurred this type of loss, you can choose one of the following ways to deduct the loss. Www free state taxes com As a casualty loss. Www free state taxes com As an ordinary loss. Www free state taxes com As a nonbusiness bad debt. Www free state taxes com Casualty loss or ordinary loss. Www free state taxes com   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. Www free state taxes com The choice is generally 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. Www free state taxes com 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. Www free state taxes com 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. Www free state taxes com Once you make this choice, you cannot change it without permission from the Internal Revenue Service. Www free state taxes com   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Www free state taxes com The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. Www free state taxes com Your loss is subject to the 2%-of-adjusted-gross-income limit. Www free state taxes com You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. Www free state taxes com Nonbusiness bad debt. Www free state taxes com   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. Www free state taxes com How to report. Www free state taxes com   The kind of deduction you choose for your loss on deposits determines how you report your loss. Www free state taxes com If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). Www free state taxes com Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. Www free state taxes com Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). Www free state taxes com More information. Www free state taxes com   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684 or Deposit in Insolvent or Bankrupt Financial Institution in Publication 550. Www free state taxes com Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. Www free state taxes com You also must be able to support the amount you take as a deduction. Www free state taxes com Casualty loss proof. Www free state taxes com   For a casualty loss, your records should show all the following. Www free state taxes com The type of casualty (car accident, fire, storm, etc. Www free state taxes com ) and when it occurred. Www free state taxes com That the loss was a direct result of the casualty. Www free state taxes com 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. Www free state taxes com Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Www free state taxes com Theft loss proof. Www free state taxes com   For a theft loss, your records should show all the following. Www free state taxes com When you discovered that your property was missing. Www free state taxes com That your property was stolen. Www free state taxes com That you were the owner of the property. Www free state taxes com Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Www free state taxes com It is important that you have records that will prove your deduction. Www free state taxes com If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. Www free state taxes com Figuring a Loss Figure the amount of your loss using the following steps. Www free state taxes com Determine your adjusted basis in the property before the casualty or theft. Www free state taxes com Determine the decrease in fair market value of the property as a result of the casualty or theft. Www free state taxes com From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. Www free state taxes com 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. Www free state taxes com Gain from reimbursement. Www free state taxes com   If your reimbursement is more than your adjusted basis in the property, you have a gain. Www free state taxes com This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. Www free state taxes com If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. Www free state taxes com See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. Www free state taxes com Leased property. Www free state taxes com   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. Www free state taxes com 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. Www free state taxes com 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. Www free state taxes com FMV of stolen property. Www free state taxes com   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. Www free state taxes com Example. Www free state taxes com Several years ago, you purchased silver dollars at face value for $150. Www free state taxes com This is your adjusted basis in the property. Www free state taxes com Your silver dollars were stolen this year. Www free state taxes com The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. Www free state taxes com Your theft loss is $150. Www free state taxes com Recovered stolen property. Www free state taxes com   Recovered stolen property is your property that was stolen and later returned to you. Www free state taxes com 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. Www free state taxes com Use this amount to refigure your total loss for the year in which the loss was deducted. Www free state taxes com   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. Www free state taxes com But report the difference only up to the amount of the loss that reduced your tax. Www free state taxes com For more information on the amount to report, see Recoveries in chapter 12. Www free state taxes com 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. Www free state taxes com However, other measures can also be used to establish certain decreases. Www free state taxes com Appraisal. Www free state taxes com   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. Www free state taxes com The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Www free state taxes com This information is needed to limit any deduction to the actual loss resulting from damage to the property. Www free state taxes com   Several factors are important in evaluating the accuracy of an appraisal, including the following. Www free state taxes com The appraiser's familiarity with your property before and after the casualty or theft. Www free state taxes com The appraiser's knowledge of sales of comparable property in the area. Www free state taxes com The appraiser's knowledge of conditions in the area of the casualty. Www free state taxes com The appraiser's method of appraisal. Www free state taxes com    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. Www free state taxes com For more information on disasters, see Disaster Area Losses, in Pub. Www free state taxes com 547. Www free state taxes com Cost of cleaning up or making repairs. Www free state taxes com   The cost of repairing damaged property is not part of a casualty loss. Www free state taxes com Neither is the cost of cleaning up after a casualty. Www free state taxes com But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Www free state taxes com The repairs are actually made. Www free state taxes com The repairs are necessary to bring the property back to its condition before the casualty. Www free state taxes com The amount spent for repairs is not excessive. Www free state taxes com The repairs take care of the damage only. Www free state taxes com The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Www free state taxes com Landscaping. Www free state taxes com   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. Www free state taxes com You may be able to measure your loss by what you spend on the following. Www free state taxes com Removing destroyed or damaged trees and shrubs minus any salvage you receive. Www free state taxes com Pruning and other measures taken to preserve damaged trees and shrubs. Www free state taxes com Replanting necessary to restore the property to its approximate value before the casualty. Www free state taxes com Car value. Www free state taxes com    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. Www free state taxes com You can use the book's retail values and modify them by such factors as mileage and the condition of your car to figure its value. Www free state taxes com 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. Www free state taxes com If your car is not listed in the books, determine its value from other sources. Www free state taxes com A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. Www free state taxes com 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. Www free state taxes com Cost of protection. Www free state taxes com   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. Www free state taxes com The amount you spend on insurance or to board up your house against a storm is not part of your loss. Www free state taxes com   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. Www free state taxes com An example would be the cost of a dike to prevent flooding. Www free state taxes com Exception. Www free state taxes com   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. Www free state taxes com See Disaster Area Losses in Publication 547. Www free state taxes com Incidental expenses. Www free state taxes com   Any incidental expenses you have 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. Www free state taxes com Replacement cost. Www free state taxes com   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. Www free state taxes com Sentimental value. Www free state taxes com   Do not consider sentimental value when determining your loss. Www free state taxes com 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. Www free state taxes com Decline in market value of property in or near casualty area. Www free state taxes com   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. Www free state taxes com You have a loss only for actual casualty damage to your property. Www free state taxes com However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. Www free state taxes com Costs of photographs and appraisals. Www free state taxes com    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. Www free state taxes com Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. Www free state taxes com    Appraisals are used to figure the decrease in FMV because of a casualty or theft. Www free state taxes com See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. Www free state taxes com   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. Www free state taxes com You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). Www free state taxes com For information about miscellaneous deductions, see chapter 28. Www free state taxes com Adjusted Basis Adjusted basis is your basis in the property (usually cost) increased or decreased by various events, such as improvements and casualty losses. Www free state taxes com For more information, see chapter 13. Www free state taxes com Insurance and Other Reimbursements If you receive an insurance payment or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Www free state taxes com You do not have a casualty or theft loss to the extent you are reimbursed. Www free state taxes com If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Www free state taxes com You must reduce your loss even if you do not receive payment until a later tax year. Www free state taxes com See Reimbursement Received After Deducting Loss , later. Www free state taxes com Failure to file a claim for reimbursement. Www free state taxes com   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Www free state taxes com Otherwise, you cannot deduct this loss as a casualty or theft loss. Www free state taxes com However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). Www free state taxes com Example. Www free state taxes com You have a car insurance policy with a $1,000 deductible. Www free state taxes com Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the deduction limits discussed later). Www free state taxes com This is true even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. Www free state taxes com Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. Www free state taxes com Other types of reimbursements are discussed next. Www free state taxes com Also see the Instructions for Form 4684. Www free state taxes com Employer's emergency disaster fund. Www free state taxes com   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. Www free state taxes com Take into consideration only the amount you used to replace your destroyed or damaged property. Www free state taxes com Example. Www free state taxes com Your home was extensively damaged by a tornado. Www free state taxes com Your loss after reimbursement from your insurance company was $10,000. Www free state taxes com Your employer set up a disaster relief fund for its employees. Www free state taxes com Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. Www free state taxes com You received $4,000 from the fund and spent the entire amount on repairs to your home. Www free state taxes com In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. Www free state taxes com Your casualty loss before applying the deduction limits discussed later is $6,000. Www free state taxes com Cash gifts. Www free state taxes com   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. Www free state taxes com This applies even if you use the money to pay for repairs to property damaged in the disaster. Www free state taxes com Example. Www free state taxes com Your home was damaged by a hurricane. Www free state taxes com Relatives and neighbors made cash gifts to you that were excludable from your income. Www free state taxes com You used part of the cash gifts to pay for repairs to your home. Www free state taxes com There were no limits or restrictions on how you could use the cash gifts. Www free state taxes com Because it was an excludable gift, the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. Www free state taxes com Insurance payments for living expenses. Www free state taxes com   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. Www free state taxes com You lose the use of your main home because of a casualty. Www free state taxes com Government authorities do not allow you access to your main home because of a casualty or threat of one. Www free state taxes com Inclusion in income. Www free state taxes com   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. Www free state taxes com Report this amount on Form 1040, line 21. Www free state taxes com However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. Www free state taxes com See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. Www free state taxes com   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. Www free state taxes com Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. Www free state taxes com Generally, these expenses include the amounts you pay for the following. Www free state taxes com Rent for suitable housing. Www free state taxes com Transportation. Www free state taxes com Food. Www free state taxes com Utilities. Www free state taxes com Miscellaneous services. Www free state taxes com 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. Www free state taxes com Example. Www free state taxes com As a result of a fire, you vacated your apartment for a month and moved to a motel. Www free state taxes com You normally pay $525 a month for rent. Www free state taxes com None was charged for the month the apartment was vacated. Www free state taxes com Your motel rent for this month was $1,200. Www free state taxes com You normally pay $200 a month for food. Www free state taxes com Your food expenses for the month you lived in the motel were $400. Www free state taxes com You received $1,100 from your insurance company to cover your living expenses. Www free state taxes com You determine the payment you must include in income as follows. Www free state taxes com 1) Insurance payment for living expenses $1,100 2) Actual expenses during the month you are unable to use your home because of fire 1,600   3) Normal living expenses 725   4) Temporary increase in living  expenses: Subtract line 3 from line 2 875 5) Amount of payment includible  in income: Subtract line 4  from line 1 $ 225 Tax year of inclusion. Www free state taxes com   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. Www free state taxes com Example. Www free state taxes com Your main home was destroyed by a tornado in August 2011. Www free state taxes com You regained use of your home in November 2012. Www free state taxes com The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. Www free state taxes com You include this amount in income on your 2012 Form 1040. Www free state taxes com 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. Www free state taxes com Disaster relief. Www free state taxes com   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. Www free state taxes com Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster are not taxable income to you. Www free state taxes com For more information, see Disaster Area Losses in Publication 547. Www free state taxes com Disaster unemployment assistance payments are unemployment benefits that are taxable. Www free state taxes com Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. Www free state taxes com Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not includible in your income. Www free state taxes com See Disaster Area Losses in Publication 547. Www free state taxes com Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you receive your actual reimbursement. Www free state taxes com This section explains the adjustment you may have to make. Www free state taxes com Actual reimbursement less than expected. Www free state taxes com   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. Www free state taxes com Example. Www free state taxes com Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. Www free state taxes com The accident was due to the negligence of the other driver. Www free state taxes com At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. Www free state taxes com You did not have a deductible loss in 2012. Www free state taxes com In January 2013, the court awarded you a judgment of $2,000. Www free state taxes com However, in July it became apparent that you will be unable to collect any amount from the other driver. Www free state taxes com You can deduct the loss in 2013 subject to the limits discussed later. Www free state taxes com Actual reimbursement more than expected. Www free state taxes com   If you later receive more reimbursement than you expected after you claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Www free state taxes com 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. Www free state taxes com You do not refigure your tax for the year you claimed the deduction. Www free state taxes com For more information, see Recoveries in chapter 12. Www free state taxes com 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. Www free state taxes com 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. Www free state taxes com Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. Www free state taxes com See Figuring a Gain in Publication 547 for more information on how to treat a gain from the reimbursement of a casualty or theft. Www free state taxes com Actual reimbursement same as expected. Www free state taxes com   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. Www free state taxes com Example. Www free state taxes com In December 2013, you had a collision while driving your personal car. Www free state taxes com Repairs to the car cost $950. Www free state taxes com You had $100 deductible collision insurance. Www free state taxes com Your insurance company agreed to reimburse you for the rest of the damage. Www free state taxes com Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. Www free state taxes com Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. Www free state taxes com When you receive the $850 from the insurance company in 2014, do not report it as income. Www free state taxes com Single Casualty on Multiple Properties Personal property. Www free state taxes com   Personal property is any property that is not real property. Www free state taxes com 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. Www free state taxes com Then combine these separate losses to figure the total loss from that casualty or theft. Www free state taxes com Example. Www free state taxes com A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. Www free state taxes com You did not have fire insurance to cover your loss. Www free state taxes com (This was the only casualty or theft you had during the year. Www free state taxes com ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. Www free state taxes com The rug cost $3,000 and had an FMV of $2,500 just before the fire. Www free state taxes com You bought the table at an auction for $100 before discovering it was an antique. Www free state taxes com It had been appraised at $900 before the fire. Www free state taxes com You figure your loss on each of these items as follows:     Chair Rug Table 1) Basis (cost) $750 $3,000 $100 2) FMV before fire $500 $2,500 $900 3) FMV after fire –0– –0– –0– 4) Decrease in FMV $500 $2,500 $900 5) Loss (smaller of (1) or  (4)) $500 $2,500 $100           6) Total loss     $3,100 Real property. Www free state taxes com   In figuring a casualty loss on personal-use real property, treat the entire property (including any improvements, such as buildings, trees, and shrubs) as one item. Www free state taxes com Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. Www free state taxes com Example. Www free state taxes com You bought your home a few years ago. Www free state taxes com You paid $160,000 ($20,000 for the land and $140,000 for the house). Www free state taxes com You also spent $2,000 for landscaping. Www free state taxes com This year a fire destroyed your home. Www free state taxes com The fire also damaged the shrubbery and trees in your yard. Www free state taxes com The fire was your only casualty or theft loss this year. Www free state taxes com Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. Www free state taxes com (The loss to your household furnishings is not shown in this example. Www free state taxes com It would be figured separately on each item, as explained earlier under Personal property . Www free state taxes com ) Shortly after the fire, the insurance company paid you $155,000 for the loss. Www free state taxes com You figure your casualty loss as follows: 1) Adjusted basis of the entire property (land, building, and landscaping) $162,000 2) FMV of entire property before fire $200,000 3) FMV of entire property after fire 30,000 4) Decrease in FMV of entire  property $170,000 5) Loss (smaller of (1) or (4)) $162,000 6) Subtract insurance 155,000 7) Amount of loss after reimbursement $7,000 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. Www free state taxes com If the loss was to property for your personal use or your family's use, there are two limits on the amount you can deduct for your casualty or theft loss. Www free state taxes com You must reduce each casualty or theft loss by $100 ($100 rule). Www free state taxes com You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). Www free state taxes com You make these reductions on Form 4684. Www free state taxes com These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. Www free state taxes com For more detailed explanations and examples, see Publication 547. Www free state taxes com Table 25-1. Www free state taxes com How To Apply the Deduction Limits for Personal-Use Property   $100 Rule 10% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. Www free state taxes com Apply this rule after you have figured the amount of your loss. Www free state taxes com You must reduce your total casualty or theft loss by 10% of your adjusted gross income. Www free state taxes com Apply this rule after you reduce each loss by $100 (the $100 rule). Www free state taxes com Single Event Apply this rule only once, even if many pieces of property are affected. Www free state taxes com Apply this rule only once, even if many pieces of property are affected. Www free state taxes com More Than One Event Apply to the loss from each event. Www free state taxes com Apply to the total of all your losses from all events. Www free state taxes com More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. Www free state taxes com Apply separately to each person. Www free state taxes com Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. Www free state taxes com Apply as if you were one person. Www free state taxes com Filing Separately Apply separately to each spouse. Www free state taxes com Apply separately to each spouse. Www free state taxes com More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. Www free state taxes com Apply separately to each owner of jointly owned property. Www free state taxes com Property used partly for business and partly for personal purposes. Www free state taxes com   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 part and for the business or income-producing part. Www free state taxes com You must figure each loss separately because the $100 rule and the 10% rule apply only to the loss on the personal-use part of the property. Www free state taxes com $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. Www free state taxes com This reduction applies to each total casualty or theft loss. Www free state taxes com It does not matter how many pieces of property are involved in an event. Www free state taxes com Only a single $100 reduction applies. Www free state taxes com Example. Www free state taxes com A hailstorm damages your home and your car. Www free state taxes com Determine the amount of loss, as discussed earlier, for each of these items. Www free state taxes com Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. Www free state taxes com Single event. Www free state taxes com   Generally, events closely related in origin cause a single casualty. Www free state taxes com 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. Www free state taxes com 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. Www free state taxes com Apply this rule after you reduce each loss by $100. Www free state taxes com For more information, see the Form 4684 instructions. Www free state taxes com If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. Www free state taxes com Example 1. Www free state taxes com In June, you discovered that your house had been burglarized. Www free state taxes com Your loss after insurance reimbursement was $2,000. Www free state taxes com Your adjusted gross income for the year you discovered the theft is $29,500. Www free state taxes com You first apply the $100 rule and then the 10% rule. Www free state taxes com Figure your theft loss deduction as follows. Www free state taxes com 1) Loss after insurance $2,000 2) Subtract $100 100 3) Loss after $100 rule $1,900 4) Subtract 10% × $29,500 AGI 2,950 5) Theft loss deduction –0– You do not have a theft loss deduction because your loss after you apply the $100 rule ($1,900) is less than 10% of your adjusted gross income ($2,950). Www free state taxes com Example 2. Www free state taxes com In March, you had a car accident that totally destroyed your car. Www free state taxes com You did not have collision insurance on your car, so you did not receive any insurance reimbursement. Www free state taxes com Your loss on the car was $1,800. Www free state taxes com In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. Www free state taxes com Your loss on the basement items after reimbursement was $2,100. Www free state taxes com Your adjusted gross income for the year that the accident and fire occurred is $25,000. Www free state taxes com You figure your casualty loss deduction as follows. Www free state taxes com       Base-     Car ment 1) Loss $1,800 $2,100 2) Subtract $100 per incident 100 100 3) Loss after $100 rule $1,700 $2,000 4) Total loss $3,700 5) Subtract 10% × $25,000 AGI 2,500 6) Casualty loss deduction $1,200 Gains and losses. Www free state taxes com   If you had both gains and losses from casualties or thefts to personal-use property, you must compare your total gains to your total losses. Www free state taxes com 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. Www free state taxes com Casualty or theft gains do not include gains you choose to postpone. Www free state taxes com See Publication 547 for information on the postponement of gain. Www free state taxes com Losses more than gains. Www free state taxes com   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. Www free state taxes com The rest, if any, is your deductible loss from personal-use property. Www free state taxes com Gains more than losses. Www free state taxes com   If your recognized gains are more than your losses, subtract your losses from your gains. Www free state taxes com The difference is treated as capital gain and must be reported on Schedule D (Form 1040). Www free state taxes com The 10% rule does not apply to your gains. Www free state taxes com When To Report Gains and Losses Gains. Www free state taxes com   If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. Www free state taxes com You must include this gain in your income in the year you receive the reimbursement, unless you choose to postpone reporting the gain as explained in Publication 547. Www free state taxes com If you have a loss, see Table 25-2 . Www free state taxes com Table 25-2. Www free state taxes com When To Deduct a Loss IF you have a loss. Www free state taxes com . Www free state taxes com . Www free state taxes com THEN deduct it in the year. Www free state taxes com . Www free state taxes com . Www free state taxes com from a casualty, the loss occurred. Www free state taxes com in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. Www free state taxes com from a theft, the theft was discovered. Www free state taxes com on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. Www free state taxes com • bad debt, deposits are totally worthless. Www free state taxes com Losses. Www free state taxes com   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. Www free state taxes com This is true even if you do not repair or replace the damaged property until a later year. Www free state taxes com   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. Www free state taxes com   If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. Www free state taxes com Loss on deposits. Www free state taxes com   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. Www free state taxes com Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. Www free state taxes com However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct the loss on your tax return or amended return for either of the following years. Www free state taxes com The year the disaster occurred. Www free state taxes com The year immediately preceding the year the disaster occurred. Www free state taxes com Gains. Www free state taxes com    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. Www free state taxes com For those special rules, see Publication 547. Www free state taxes com Postponed tax deadlines. Www free state taxes com   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. Www free state taxes com The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Www free state taxes com   If any tax deadline is postponed, the IRS will publicize the postponement in your area by publishing a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Www free state taxes com Go to www. Www free state taxes com irs. Www free state taxes com gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. Www free state taxes com Who is eligible. Www free state taxes com   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Www free state taxes com Any individual whose main home is located in a covered disaster area (defined next). Www free state taxes com Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Www free state taxes com Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. Www free state taxes com Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Www free state taxes com The main home or principal place of business does not have to be located in the covered disaster area. Www free state taxes com Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Www free state taxes com The spouse on a joint return with a taxpayer who is eligible for postponements. Www free state taxes com Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a postponed tax deadline are located in the covered disaster area. Www free state taxes com Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. Www free state taxes com Any other person determined by the IRS to be affected by a federally declared disaster. Www free state taxes com Covered disaster area. Www free state taxes com   This is an area of a federally declared disaster in which the IRS has decided to postpone tax deadlines for up to 1 year. Www free state taxes com Abatement of interest and penalties. Www free state taxes com   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. Www free state taxes com More information. Www free state taxes com   For more information, see Disaster Area Losses in Publication 547. Www free state taxes com How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. Www free state taxes com If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. Www free state taxes com Combine the gains and losses on one Form 4684. Www free state taxes com Follow the form instructions as to which lines to fill out. Www free state taxes com In addition, you must use the appropriate schedule to report a gain or loss. Www free state taxes com The schedule you use depends on whether you have a gain or loss. Www free state taxes com If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. Www free state taxes com   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive, and by any deductible loss. Www free state taxes com Amounts you spend to restore your property after a casualty increase your adjusted basis. Www free state taxes com See Adjusted Basis in chapter 13 for more information. Www free state taxes com Net operating loss (NOL). Www free state taxes com    If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have an NOL. Www free state taxes com You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you have already paid. Www free state taxes com Or, you can use it to lower your tax in a later year. Www free state taxes com You do not have to be in business to have an NOL from a casualty or theft loss. Www free state taxes com For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Www free state taxes com Prev  Up  Next   Home   More Online Publications