taxmap/pubs/p547-000.htm#en_us_publink1000225183taxmap/pubs/p547-000.htm#en_us_publink1000289328
For the latest information about developments related to Publication 547, such
as legislation enacted after it was published, go to
www.irs.gov/pub547.
Photographs of missing children.
(p1)The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a
child.
This publication explains the tax treatment of casualties, thefts, and losses on deposits. A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident, or similar event. A theft occurs when someone steals your property. A loss on deposits occurs when your financial institution becomes insolvent or bankrupt.
This publication discusses the following topics.
- Definitions of a casualty, theft, and loss on deposits.
- How to figure the amount of your gain or loss.
- How to treat insurance and other reimbursements you receive.
- The deduction limits.
- When and how to report a casualty or theft.
- The special rules for disaster area losses.
Generally, when you have a casualty or theft, you have to file Form 4684. You may also have to file one or more of the following forms.
- Schedule A (Form 1040).
- Form 1040NR, Schedule A (for nonresident aliens).
- Schedule D.
- Form 4797.
For details on which form to use, see
How To Report Gains and Losses, later.
For information on condemnations of property, see
Involuntary Conversions in chapter 1 of Publication
544, Sales and Other Dispositions of Assets.
Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property), is available to help you make a list of your stolen or damaged personal-use property and figure your loss. It includes schedules to help you figure the loss on your home and its contents, and your motor
vehicles.
Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook, is available to help you make a list of your stolen or damaged business or income-producing property and figure your
loss.
taxmap/pubs/p547-000.htm#en_us_publink1000225196We welcome your comments about this publication and your suggestions for future
editions.
You can write to us at the following address:
Internal Revenue Service
Individual and Specialty Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your
correspondence.
You can email us at
taxforms@irs.gov. Please put "Publications Comment" on the subject line. You can also send us comments from
www.irs.gov/formspubs/. Select "Comment on Tax Forms and Publications" under "Information
about."
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.
taxmap/pubs/p547-000.htm#en_us_publink1000225197Visit
www.irs.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.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above
addresses.
taxmap/pubs/p547-000.htm#TXMP0fdb3459Useful items
You may want to see:
Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 551 Basis of Assets 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and
Theft Loss Workbook Form (and Instructions) Schedule A (Form 1040):
Itemized Deductions Form 1040NR, Schedule A:
Itemized Deductions (for nonresident aliens) Schedule D (Form 1040):
Capital Gains and Losses 4684:
Casualties and Thefts 4797:
Sales of Business Property See
How To Get Tax Help
near the end of this publication for information about getting publications and
forms.
A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.
- A sudden event is one that is swift, not gradual or progressive.
- An unexpected event is one that is ordinarily unanticipated and
unintended.
- An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were
engaged.
Generally, casualty losses are deductible during the taxable year that the loss occurred. See
Table 3, later.
Deductible casualty losses can result from a number of different causes, including the following.
- Car accidents (but see
Nondeductible losses, next, for exceptions).
- Earthquakes.
- Fires (but see
Nondeductible losses, next, for exceptions).
- Floods.
- Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under
Disaster Area Losses, later.
- Mine cave-ins.
- Shipwrecks.
- Sonic booms.
- Storms, including hurricanes and tornadoes.
- Terrorist attacks.
- Vandalism.
- Volcanic eruptions.
A casualty loss is not deductible if the damage or destruction is caused by the following.
- Accidentally breaking articles such as glassware or china under normal conditions.
- A family pet (explained below).
- A fire if you willfully set it, or pay someone else to set it.
- A car accident if your willful negligence or willful act caused it. The same is true if the willful act or willful negligence of someone acting for you caused the accident.
- Progressive deterioration (explained below). However, see
Special Procedure for Damage From Corrosive Drywall, later.
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.
Your antique oriental rug was damaged by your new puppy before it was housebroken. Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss.
taxmap/pubs/p547-000.htm#en_us_publink1000225207Loss of property due to progressive deterioration is not deductible as a casualty loss. This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. The following are examples of damage due to progressive deterioration.
- The steady weakening of a building due to normal wind and weather
conditions.
- The deterioration and damage to a water heater that bursts. However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty.
- Most losses of property caused by droughts. To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit.
- Termite or moth damage.
- The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss.
Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. For example, amounts you paid for repairs in 2012 are deductible on your 2012 tax return and amounts you paid for repairs in 2011 are deductible on your 2011 tax return.
Note.If you paid for any repairs before 2012 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U.S. Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. Form 4684 for the appropriate year can be found at IRS.gov. 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.
taxmap/pubs/p547-000.htm#en_us_publink1000251020For 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. The revised identification guidance and remediation guidelines are available at
www.cpsc.gov/info/drywall/index.html.If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. 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.
taxmap/pubs/p547-000.htm#en_us_publink1000251022Enter "Revenue Procedure 2010-36".
taxmap/pubs/p547-000.htm#en_us_publink1000251023Enter the information required by the line 1 instructions.
taxmap/pubs/p547-000.htm#en_us_publink1000251024Skip this line.
taxmap/pubs/p547-000.htm#en_us_publink1000251025Enter the amount of insurance or other reimbursements you received (including through litigation). If none, enter
-0-.
taxmap/pubs/p547-000.htm#en_us_publink1000251026Skip these lines.
taxmap/pubs/p547-000.htm#en_us_publink1000251027Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. 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).
If line 8 is more than line 3, do one of the following.
- If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and
8.
- If item (1) does not apply to you, enter the full amount of the difference between lines 3 and
8.
If line 8 is less than or equal to line 3, you cannot claim a casualty loss
deduction using this special procedure.
 | 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. See
Reimbursement Received After Deducting Loss, later. |
taxmap/pubs/p547-000.htm#en_us_publink1000251030Complete these lines according to the Instructions for Form 4684.
taxmap/pubs/p547-000.htm#en_us_publink1000251031If 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. 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. Furthermore, you must have proof that shows the following.
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