 So forms to file. 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. We've got the schedule A, form 1040. That's where our general focus is here. Schedule A, form 1040, and R for non-resident aliens. Schedule D, form 1040, and then form 4797. Condemnations for information on condemnations of properties and see involuntary conversions in Chapter 1 of Publication 544, sale, and other disposition of assets. So workbooks for casualties and thefts. You've got Publication 584, Casualty, Disaster, Theft, Loss, Workbook, Personal Property is available to help you make a list of your stolen or damaged personal property and figure your loss. So obviously when we're thinking about a loss that has occurred, we've got to determine what the loss is if we've got personal property, then we may have to list out the property and whatnot to help us determine the loss. So it includes schedules to help you figure the loss on your home and its contents and your motor vehicles. Publication 584B, 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. Casualty, a casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, and unusual. So those are kind of key components here of the casualty. So your car rusted over a long term, over 20 years, you know, it turned into a pile of rust. Well, that's not a sudden type of event. It should be an unexpected, you know, type of event, something that you would not normally have foreseen, for example, so it rained. If it rains quite often and the rain caused it, well, that's not really unexpected. If it was a storm and your whole house blew away, then obviously that would be unexpected and generally unusual. Okay, so a sudden event is one that is swift, not gradual or progressive. So you can't, you can't say the rust on your car over the last 30 years. So an unexpected event is one that ordinarily unanticipated and unintended. So again, the rain happening in the winter is something that wouldn't be unanticipated. An unusual event is one that isn't a day-to-day occurrence and that isn't typically a typical of the activity in which you were engaged. So it's got to be something obviously somewhat unusual. Casualty losses or deductible during the tax year that the loss is sustained, this is generally the tax year that the loss occurred. So in general purposes, you would think usually that you would be able to get the deduction when the casualty happened. We may see some exceptions with like federally declared disasters, for example, we might have some capacity to take between two years of taking the loss here, but you would think the normal rule would be that you take the loss in the year that it occurred. So however, a casualty loss may be sustained in a year after the casualty occurred, see when to report gains and losses and table three later. So definitions, three specific types of casualty losses are described in this publication. What publication? You got the federally declared losses, the disaster losses, and qualified disaster losses. So all three types of losses refer to federally declared disasters. Remember that was a key component here, federally declared disasters, right? Your cousin stole money out of your wallet or something like that, isn't a federally declared disaster. So but the requirement for each loss vary. So a federally declared disaster is a disaster determined by the President of the United States to warrant assistance by the federal government under the Stafford Act. So a federally declared disaster includes A, a major disaster declaration or B, an emergency declaration act under the Stafford Act, federal casualty loss. A federal casualty loss is an individual's casualty or theft loss of personal use property that is attributable to a federally declared disaster. The casualty loss must occur in a state receiving a federal disaster declaration. So now you've got this declaration that you have to have this formal process that the loss has been declared. If you've suffered a federal casualty loss, you are eligible to claim a casualty loss deduction. If you suffered a casualty or theft loss of personal use property that wasn't attributable to a federally declared disaster, it isn't a federal casualty loss. And you may not claim a casualty loss deduction unless the exception applies. See the caution under deductible losses later. Disaster loss. A disaster loss is a loss that is attributable to a federally declared disaster and that occurs in an area eligible for assistance pursuant to the Presidential Declaration. The disaster loss must occur in a county eligible for public or individual assistance or both. Disaster losses aren't limited to the individual personal use property and may be claimed for individual business or income producing property and by corporations as corporations and partnerships. If you suffered a disaster loss, you are eligible to claim a casualty loss deduction and to elect to claim the loss in the preceding tax year. So once again, now we've got this tax year situation in terms of when are you going to declare, be able to declare the loss. And this is kind of important because of course, if for example, you're in tax year 2022 and that's when the actual disaster happened in the year of 2022. But at least no big disasters happened. Well, you wouldn't get the benefit from a tax perspective until you file the tax return by April 15th of 2023. And even then you might not get as much of a benefit from the loss because you might not have as much income because the disaster, you know, hampered your ability to make income. So if you can take the loss in the prior year or something like that, then maybe your income would have been higher and maybe you can amend the tax return or if you haven't filed the tax return, you could file the tax return and possibly get access to the to the support sooner maybe in that way and possibly get a higher tax benefit. So you want to take into consideration when you can deduct the loss. So once again, if you suffered a disaster loss, you are eligible to claim a casualty loss deduction and to elect to claim the loss in the preceding tax year. See disaster area losses later. Okay, so qualified disaster loss. So a qualified disaster loss also includes an individual's casualty and theft loss of personal use property that is attributable to a major disaster declared by the president under section 401 of Stanford Act in 2016. Hurricane Harvey tropical storm Harvey. This is Hurricane Irma. These are going to be applicable to 2021. So it's going to be a different set of items this year. So I'm going to go through these here. If you suffered a qualified disaster loss, you are eligible to claim a casualty loss deduction to elect to claim the loss in the preceding tax year and to deduct the loss without itemizing other deductions on schedule a form 1040. You can see irs.gov for disaster relief for date specific declarations associated with disasters for more information. So in other words, you want to make sure you look up the actual disaster so you can get the proper designation of what the disaster is so you can do the proper recording on the tax return. So deductible losses for tax year 2018 through 2025. If you are an individual casualty losses of personal use property are deductible only if the loss is attributable to a federally declared disaster federal casualty loss. So if the event causing you to suffer a personal casualty loss not attributed to a federally declared disaster occurred before January 1st 2018 but the casualty loss wasn't sustained until January 1st 2018 or later the casualty loss isn't deductible. So see when to report gain and losses later for more information on when a casualty loss is sustained. So we're not going to go into everything on this particular publication but we'll do an example in tax software possibly in future presentations. You could take a look at the irs website for publication 547 as well as form 4684 and related instructions if you want to drill down on this in more depth.