Navigate Your Casualty Loss Deduction
Losing property is tough. This tool helps you understand the tax relief available for casualty and disaster losses under current U.S. tax law.
Step 1: Check Your Eligibility
For tax years 2018-2025, personal casualty or theft losses are only deductible if they are caused by a federally declared disaster.
Important: Under current law (2018-2025), personal casualty and theft losses are not deductible unless they are caused by a federally declared disaster. An exception exists if you have personal casualty gains to offset the loss.
Step 2: Calculate Your Deduction
(Waives 10% AGI Rule, uses $500 reduction)
Your Deduction Breakdown
Discover Other Key Benefits
Beyond the immediate deduction, there are other powerful provisions to help you recover financially.
Deduct Loss in the Prior Year
For a federal disaster, you can choose to deduct the loss on your prior year's tax return. This allows you to get a faster refund by amending that return, providing crucial cash flow for recovery.
Postpone Tax on Gains
If your insurance payout is more than your property's cost basis, creating a gain, you can avoid paying tax on it. Simply reinvest the funds in replacement property within the specified time (2-4 years) to defer the gain.