Generally you may deduct losses to your home, household items and vehicles on your Federal income tax return. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement and you must reduce the loss by the amount of the reimbursement.

A casualty does not include normal wear and tear or progressive deterioration from age or termite damage. The damage must be caused by a sudden, unexpected, or unusual event (e.g., car accident, fire, earthquake, flood, vandalism). For the definition of "sudden, unexpected, or unusual" and for more information on the types of losses that are generally deductible as casualty losses, see Publication 547, Casualties, Disasters, and Thefts.

A theft is the taking and removing of property or money with the intent to deprive the owner of it. Lost or mislaid property is not considered a theft.

If business or income–producing property, such as rental property, is the subject of a casualty or theft loss, the amount of your loss is your adjusted basis in the property minus any salvage value, and minus any insurance or other reimbursement you receive or expect to receive. Adjusted basis is usually your cost, increased or decreased by various events such as improvements or depreciation. For more information about the basis of property, refer to Topic 703, or Publication 551, Basis of Assets.

If you believe that your loss qualifies as a casualty or theft loss, refer to Publication 547, Casualties, Disasters, and Thefts. For losses involving personal-use property, refer to Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property). For losses involving business-use property, refer to Publication 584B (PDF), Business Casualty, Disaster and Theft Loss Workbook.

To claim a casualty or theft loss, you must complete Form 4684 (PDF), Casualties and Thefts, and attach it to your return. You may claim casualty or theft loss of personal use property only if you itemize deductions on Form 1040, Schedule A (PDF).

If you have a casualty loss from a disaster that occurred in an area declared by the President to be a federal disaster area, refer to Topic 515.