CHAPTER 17 Casualty and Theft Losses

  1. Casualties and Thefts
  2. Condemnations and Threats of Condemnation
  3. Disaster Losses
  4. Deducting Property Insurance and Other Casualty/Theft-Related Items
  5. Certain Disaster Victims
  6. Disaster Assistance

Floods in Louisiana, Texas and West Virginia, tornadoes and straight-line winds in Arkansas, and fires in California—these are just some examples of the types of weather-related events that can do severe damage to your business property. Terrorist attacks and civil riots are other means of causing damage to business property as are man-made accidents, such as oil spills. If you suffer casualty or theft losses to your business property, you can deduct the losses. You may also suffer a loss through condemnation or a sale under threat of condemnation. Again, the loss is deductible. Certain losses—those from events declared to be federal disasters—may even allow you to recover taxes you have already paid in an earlier year. But if you receive insurance proceeds or other property in return, you may have a gain rather than a loss. The law allows you to postpone reporting of the gain if certain steps are taken.

For further information about deducting casualty and theft losses, see IRS Publication 547, Casualties, Disasters, and Thefts (Business and Nonbusiness) and IRS Publication 2194B, Disaster Losses Kit for Businesses.

Casualties and Thefts

If you suffer a casualty or theft loss to business property, you can deduct the loss. There are no dollar limitations ...

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