Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

E-file State Tax For Free

Taxslayer Coupon CodeEz Forms 2013Form Ez 1040Free 1040ez 2013What If I Didn T File Taxes In 20112011 Irs Tax Forms AvailableFree Online Tax2010 1040 FormFile Amended Tax Return Free1040ez 2012 Tax Form1040 Estimated Tax FormForm 1040ezWww Hr BlockState Tax OnlineHow To Amend TaxHow To File Student TaxesTax Return For UnemployedFederal Tax Forms 1040xFree State Tax FilingFile Taxes 2010 FreeHow Do I File A 1040x1040ez Tax TableFree Tax PreparationTurbotax Deluxe Federal E File State 2011 Old VersionFiling Self Employment TaxesH&r Block Advantage Free FileIrs Forms 1040Free 1040ez Tax FormFile Past Taxes OnlineMa Taxes Ng Army MilAmend My 2013 Tax ReturnFree Tax ActFile Tax Extension For 2011 FreeStudent IncomeWhere To File 1040xAmending 2012 Tax ReturnTax Act 20091040 Easy FormForm 1040x InstructionsAmmended Tax Form

E-file State Tax For Free

E-file state tax for free Publication 547 - Main Content Table of Contents CasualtyFamily pet. E-file state tax for free Progressive deterioration. E-file state tax for free Special Procedure for Damage From Corrosive Drywall Theft Loss on Deposits Proof of Loss Figuring a LossGain from reimbursement. E-file state tax for free Business or income-producing property. E-file state tax for free Loss of inventory. E-file state tax for free Leased property. E-file state tax for free Exception for personal-use real property. E-file state tax for free Decrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Deduction Limits2% Rule $100 Rule 10% Rule Figuring the Deduction Figuring a GainPostponement of Gain When To Report Gains and LossesLoss on deposits. E-file state tax for free Lessee's loss. E-file state tax for free Disaster Area LossesDisaster loss to inventory. E-file state tax for free Main home in disaster area. E-file state tax for free Unsafe home. E-file state tax for free Time limit for making choice. E-file state tax for free Revoking your choice. E-file state tax for free Figuring the loss deduction. E-file state tax for free How to report the loss on Form 1040X. E-file state tax for free Records. E-file state tax for free Need a copy of your tax return for the preceding year? Postponed Tax Deadlines Contacting the Federal Emergency Management Agency (FEMA) How To Report Gains and LossesProperty held 1 year or less. E-file state tax for free Property held more than 1 year. E-file state tax for free Depreciable property. E-file state tax for free Adjustments to Basis If Deductions Are More Than Income How To Get Tax HelpLow Income Taxpayer Clinics Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. E-file state tax for free A sudden event is one that is swift, not gradual or progressive. E-file state tax for free An unexpected event is one that is ordinarily unanticipated and unintended. E-file state tax for free 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. E-file state tax for free Generally, casualty losses are deductible during the taxable year that the loss occurred. E-file state tax for free See Table 3, later. E-file state tax for free Deductible losses. E-file state tax for free   Deductible casualty losses can result from a number of different causes, including the following. E-file state tax for free Car accidents (but see Nondeductible losses , next, for exceptions). E-file state tax for free Earthquakes. E-file state tax for free Fires (but see Nondeductible losses , next, for exceptions). E-file state tax for free Floods. E-file state tax for free Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses , later. E-file state tax for free Mine cave-ins. E-file state tax for free Shipwrecks. E-file state tax for free Sonic booms. E-file state tax for free Storms, including hurricanes and tornadoes. E-file state tax for free Terrorist attacks. E-file state tax for free Vandalism. E-file state tax for free Volcanic eruptions. E-file state tax for free Nondeductible losses. E-file state tax for free   A casualty loss is not deductible if the damage or destruction is caused by the following. E-file state tax for free Accidentally breaking articles such as glassware or china under normal conditions. E-file state tax for free A family pet (explained below). E-file state tax for free A fire if you willfully set it, or pay someone else to set it. E-file state tax for free A car accident if your willful negligence or willful act caused it. E-file state tax for free The same is true if the willful act or willful negligence of someone acting for you caused the accident. E-file state tax for free Progressive deterioration (explained below). E-file state tax for free However, see Special Procedure for Damage From Corrosive Drywall , later. E-file state tax for free Family pet. E-file state tax for free   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. E-file state tax for free Example. E-file state tax for free Your antique oriental rug was damaged by your new puppy before it was housebroken. E-file state tax for free Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. E-file state tax for free Progressive deterioration. E-file state tax for free   Loss of property due to progressive deterioration is not deductible as a casualty loss. E-file state tax for free This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. E-file state tax for free The following are examples of damage due to progressive deterioration. E-file state tax for free The steady weakening of a building due to normal wind and weather conditions. E-file state tax for free The deterioration and damage to a water heater that bursts. E-file state tax for free However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. E-file state tax for free Most losses of property caused by droughts. E-file state tax for free To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. E-file state tax for free Termite or moth damage. E-file state tax for free The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. E-file state tax for free However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. E-file state tax for free Special Procedure for Damage From Corrosive Drywall Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. E-file state tax for free Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. E-file state tax for free For example, amounts you paid for repairs in 2013 are deductible on your 2013 tax return and amounts you paid for repairs in 2012 are deductible on your 2012 tax return. E-file state tax for free Note. E-file state tax for free If you paid for any repairs before 2013 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U. E-file state tax for free S. E-file state tax for free Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. E-file state tax for free Form 4684 for the appropriate year can be found at IRS. E-file state tax for free gov. E-file state tax for free 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. E-file state tax for free Corrosive drywall. E-file state tax for free   For 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. E-file state tax for free The revised identification guidance and remediation guidelines are available at www. E-file state tax for free cpsc. E-file state tax for free gov/Safety-Education/Safety-Education-Centers/Drywall. E-file state tax for free Special instructions for completing Form 4684. E-file state tax for free   If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. E-file state tax for free 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. E-file state tax for free Top margin of Form 4684. E-file state tax for free   Enter “Revenue Procedure 2010-36”. E-file state tax for free Line 1. E-file state tax for free   Enter the information required by the line 1 instructions. E-file state tax for free Line 2. E-file state tax for free   Skip this line. E-file state tax for free Line 3. E-file state tax for free   Enter the amount of insurance or other reimbursements you received (including through litigation). E-file state tax for free If none, enter -0-. E-file state tax for free Lines 4–7. E-file state tax for free   Skip these lines. E-file state tax for free Line 8. E-file state tax for free   Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. E-file state tax for free Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. E-file state tax for free Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. E-file state tax for free 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). E-file state tax for free Line 9. E-file state tax for free   If line 8 is more than line 3, do one of the following. E-file state tax for free If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8. E-file state tax for free If item (1) does not apply to you, enter the full amount of the difference between lines 3 and 8. E-file state tax for free If line 8 is less than or equal to line 3, you cannot claim a casualty loss deduction using this special procedure. E-file state tax for free    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. E-file state tax for free See Reimbursement Received After Deducting Loss, later. E-file state tax for free Lines 10–18. E-file state tax for free   Complete these lines according to the Instructions for Form 4684. E-file state tax for free Choosing not to follow this special procedure. E-file state tax for free   If 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. E-file state tax for free 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 . E-file state tax for free Furthermore, you must have proof that shows the following. E-file state tax for free The loss is properly deductible in the tax year you claimed it and not in some other year. E-file state tax for free See When To Report Gains and Losses , later. E-file state tax for free The amount of the claimed loss. E-file state tax for free See Proof of Loss , later. E-file state tax for free No claim for reimbursement of any portion of the loss exists for which there is a reasonable prospect of recovery. E-file state tax for free See When To Report Gains and Losses , later. E-file state tax for free Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. E-file state tax for free The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. E-file state tax for free You do not need to show a conviction for theft. E-file state tax for free Theft includes the taking of money or property by the following means. E-file state tax for free Blackmail. E-file state tax for free Burglary. E-file state tax for free Embezzlement. E-file state tax for free Extortion. E-file state tax for free Kidnapping for ransom. E-file state tax for free Larceny. E-file state tax for free Robbery. E-file state tax for free The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. E-file state tax for free Decline in market value of stock. E-file state tax for free   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. E-file state tax for free However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. E-file state tax for free You report a capital loss on Schedule D (Form 1040). E-file state tax for free For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. E-file state tax for free Mislaid or lost property. E-file state tax for free    The simple disappearance of money or property is not a theft. E-file state tax for free However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. E-file state tax for free Sudden, unexpected, and unusual events were defined earlier under Casualty . E-file state tax for free Example. E-file state tax for free A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. E-file state tax for free The diamond falls from the ring and is never found. E-file state tax for free The loss of the diamond is a casualty. E-file state tax for free Losses from Ponzi-type investment schemes. E-file state tax for free   The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes: Revenue Ruling 2009-9, 2009-14 I. E-file state tax for free R. E-file state tax for free B. E-file state tax for free 735 (available at www. E-file state tax for free irs. E-file state tax for free gov/irb/2009-14_IRB/ar07. E-file state tax for free html). E-file state tax for free Revenue Procedure 2009-20, 2009-14 I. E-file state tax for free R. E-file state tax for free B. E-file state tax for free 749 (available at www. E-file state tax for free irs. E-file state tax for free gov/irb/2009-14_IRB/ar11. E-file state tax for free html). E-file state tax for free Revenue Procedure 2011-58, 2011-50 I. E-file state tax for free R. E-file state tax for free B. E-file state tax for free 847 (available at www. E-file state tax for free irs. E-file state tax for free gov/irb/2011-50_IRB/ar11. E-file state tax for free html). E-file state tax for free If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. E-file state tax for free Skip lines 19 to 27, but you must fill out Section B, lines 29 to 39, as appropriate. E-file state tax for free Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. E-file state tax for free You do not need to complete Appendix A. E-file state tax for free For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. E-file state tax for free   If you choose not to use the procedures in Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. E-file state tax for free Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. E-file state tax for free If you incurred this type of loss, you can choose one of the following ways to deduct the loss. E-file state tax for free As a casualty loss. E-file state tax for free As an ordinary loss. E-file state tax for free As a nonbusiness bad debt. E-file state tax for free Casualty loss or ordinary loss. E-file state tax for free   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. E-file state tax for free The choice generally is made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. E-file state tax for free If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. E-file state tax for free However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. E-file state tax for free Once you make the choice, you cannot change it without permission from the Internal Revenue Service. E-file state tax for free   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. E-file state tax for free The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. E-file state tax for free Your loss is subject to the 2%-of-adjusted-gross-income limit. E-file state tax for free You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. E-file state tax for free Nonbusiness bad debt. E-file state tax for free   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. E-file state tax for free How to report. E-file state tax for free   The kind of deduction you choose for your loss on deposits determines how you report your loss. E-file state tax for free See Table 1. E-file state tax for free More information. E-file state tax for free   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684. E-file state tax for free Deducted loss recovered. E-file state tax for free   If you recover an amount you deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of recovery. E-file state tax for free If any part of the original deduction did not reduce your tax in the earlier year, you do not have to include that part of the recovery in your income. E-file state tax for free For more information, see Recoveries in Publication 525. E-file state tax for free Proof of Loss To deduct a casualty or theft loss, you must be able to show that there was a casualty or theft. E-file state tax for free You also must be able to support the amount you take as a deduction. E-file state tax for free Casualty loss proof. E-file state tax for free   For a casualty loss, you should be able to show all of the following. E-file state tax for free The type of casualty (car accident, fire, storm, etc. E-file state tax for free ) and when it occurred. E-file state tax for free That the loss was a direct result of the casualty. E-file state tax for free That you were the owner of the property, or if you leased the property from someone else, that you were contractually liable to the owner for the damage. E-file state tax for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. E-file state tax for free Theft loss proof. E-file state tax for free   For a theft loss, you should be able to show all of the following. E-file state tax for free When you discovered that your property was missing. E-file state tax for free That your property was stolen. E-file state tax for free That you were the owner of the property. E-file state tax for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. E-file state tax for free    It is important that you have records that will prove your deduction. E-file state tax for free If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. E-file state tax for free Figuring a Loss To determine your deduction for a casualty or theft loss, you must first figure your loss. E-file state tax for free Table 1. E-file state tax for free Reporting Loss on Deposits IF you choose to report the loss as a(n). E-file state tax for free . E-file state tax for free . E-file state tax for free   THEN report it on. E-file state tax for free . E-file state tax for free . E-file state tax for free casualty loss   Form 4684 and Schedule A  (Form 1040). E-file state tax for free ordinary loss   Schedule A (Form 1040). E-file state tax for free nonbusiness bad debt   Form 8949 and Schedule D (Form 1040). E-file state tax for free Amount of loss. E-file state tax for free   Figure the amount of your loss using the following steps. E-file state tax for free Determine your adjusted basis in the property before the casualty or theft. E-file state tax for free Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. E-file state tax for free From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. E-file state tax for free For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. E-file state tax for free Gain from reimbursement. E-file state tax for free   If your reimbursement is more than your adjusted basis in the property, you have a gain. E-file state tax for free This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. E-file state tax for free If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. E-file state tax for free See Figuring a Gain , later. E-file state tax for free Business or income-producing property. E-file state tax for free   If you have business or income-producing property, such as rental property, and it is stolen or completely destroyed, the decrease in FMV is not considered. E-file state tax for free Your loss is figured as follows:   Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive   Loss of inventory. E-file state tax for free   There are two ways you can deduct a casualty or theft loss of inventory, including items you hold for sale to customers. E-file state tax for free   One way is to deduct the loss through the increase in the cost of goods sold by properly reporting your opening and closing inventories. E-file state tax for free Do not claim this loss again as a casualty or theft loss. E-file state tax for free If you take the loss through the increase in the cost of goods sold, include any insurance or other reimbursement you receive for the loss in gross income. E-file state tax for free   The other way is to deduct the loss separately. E-file state tax for free If you deduct it separately, eliminate the affected inventory items from the cost of goods sold by making a downward adjustment to opening inventory or purchases. E-file state tax for free Reduce the loss by the reimbursement you received. E-file state tax for free Do not include the reimbursement in gross income. E-file state tax for free If you do not receive the reimbursement by the end of the year, you may not claim a loss to the extent you have a reasonable prospect of recovery. E-file state tax for free Leased property. E-file state tax for free   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. E-file state tax for free Separate computations. E-file state tax for free   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. E-file state tax for free Then combine the losses to determine the total loss from that casualty or theft. E-file state tax for free Exception for personal-use real property. E-file state tax for free   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. E-file state tax for free Figure the loss using the smaller of the following. E-file state tax for free The decrease in FMV of the entire property. E-file state tax for free The adjusted basis of the entire property. E-file state tax for free   See Real property under Figuring the Deduction, later. E-file state tax for free Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. E-file state tax for free The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. E-file state tax for free FMV of stolen property. E-file state tax for free   The FMV of property immediately after a theft is considered to be zero because you no longer have the property. E-file state tax for free Example. E-file state tax for free Several years ago, you purchased silver dollars at face value for $150. E-file state tax for free This is your adjusted basis in the property. E-file state tax for free Your silver dollars were stolen this year. E-file state tax for free The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. E-file state tax for free Your theft loss is $150. E-file state tax for free Recovered stolen property. E-file state tax for free   Recovered stolen property is your property that was stolen and later returned to you. E-file state tax for free If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. E-file state tax for free Use this amount to refigure your total loss for the year in which the loss was deducted. E-file state tax for free   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. E-file state tax for free But report the difference only up to the amount of the loss that reduced your tax. E-file state tax for free For more information on the amount to report, see Recoveries in Publication 525. E-file state tax for free Figuring Decrease in FMV — Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. E-file state tax for free However, other measures also can be used to establish certain decreases. E-file state tax for free See Appraisal and Cost of cleaning up or making repairs , next. E-file state tax for free Appraisal. E-file state tax for free   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterwards should be made by a competent appraiser. E-file state tax for free The appraiser must recognize the effects of any general market decline that may occur along with the casualty. E-file state tax for free This information is needed to limit any deduction to the actual loss resulting from damage to the property. E-file state tax for free   Several factors are important in evaluating the accuracy of an appraisal, including the following. E-file state tax for free The appraiser's familiarity with your property before and after the casualty or theft. E-file state tax for free The appraiser's knowledge of sales of comparable property in the area. E-file state tax for free The appraiser's knowledge of conditions in the area of the casualty. E-file state tax for free The appraiser's method of appraisal. E-file state tax for free You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. E-file state tax for free For more information on disasters, see Disaster Area Losses, later. E-file state tax for free Cost of cleaning up or making repairs. E-file state tax for free   The cost of repairing damaged property is not part of a casualty loss. E-file state tax for free Neither is the cost of cleaning up after a casualty. E-file state tax for free But you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. E-file state tax for free The repairs are actually made. E-file state tax for free The repairs are necessary to bring the property back to its condition before the casualty. E-file state tax for free The amount spent for repairs is not excessive. E-file state tax for free The repairs take care of the damage only. E-file state tax for free The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. E-file state tax for free Landscaping. E-file state tax for free   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. E-file state tax for free You may be able to measure your loss by what you spend on the following. E-file state tax for free Removing destroyed or damaged trees and shrubs, minus any salvage you receive. E-file state tax for free Pruning and other measures taken to preserve damaged trees and shrubs. E-file state tax for free Replanting necessary to restore the property to its approximate value before the casualty. E-file state tax for free Car value. E-file state tax for free   Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. E-file state tax for free You can use the books' retail values and modify them by factors such as the mileage and condition of your car to figure its value. E-file state tax for free The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. E-file state tax for free If your car is not listed in the books, determine its value from other sources. E-file state tax for free A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. E-file state tax for free Figuring Decrease in FMV — Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. E-file state tax for free Cost of protection. E-file state tax for free   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. E-file state tax for free The amount you spend on insurance or to board up your house against a storm is not part of your loss. E-file state tax for free If the property is business property, these expenses are deductible as business expenses. E-file state tax for free   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. E-file state tax for free An example would be the cost of a dike to prevent flooding. E-file state tax for free Exception. E-file state tax for free   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments (discussed later under Disaster Area Losses ). E-file state tax for free Related expenses. E-file state tax for free   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. E-file state tax for free However, they may be deductible as business expenses if the damaged or stolen property is business property. E-file state tax for free Replacement cost. E-file state tax for free   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. E-file state tax for free Example. E-file state tax for free You bought a new chair 4 years ago for $300. E-file state tax for free In April, a fire destroyed the chair. E-file state tax for free You estimate that it would cost $500 to replace it. E-file state tax for free If you had sold the chair before the fire, you estimate that you could have received only $100 for it because it was 4 years old. E-file state tax for free The chair was not insured. E-file state tax for free Your loss is $100, the FMV of the chair before the fire. E-file state tax for free It is not $500, the replacement cost. E-file state tax for free Sentimental value. E-file state tax for free   Do not consider sentimental value when determining your loss. E-file state tax for free If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. E-file state tax for free Decline in market value of property in or near casualty area. E-file state tax for free   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. E-file state tax for free You have a loss only for actual casualty damage to your property. E-file state tax for free However, if your home is in a federally declared disaster area, see Disaster Area Losses , later. E-file state tax for free Costs of photographs and appraisals. E-file state tax for free   Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. E-file state tax for free Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. E-file state tax for free   Appraisals are used to figure the decrease in FMV because of a casualty or theft. E-file state tax for free See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. E-file state tax for free   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. E-file state tax for free They are expenses in determining your tax liability. E-file state tax for free You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). E-file state tax for free Adjusted Basis The measure of your investment in the property you own is its basis. E-file state tax for free For property you buy, your basis is usually its cost to you. E-file state tax for free For property you acquire in some other way, such as inheriting it, receiving it as a gift, or getting it in a nontaxable exchange, you must figure your basis in another way, as explained in Publication 551. E-file state tax for free If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. E-file state tax for free Adjustments to basis. E-file state tax for free    While you own the property, various events may take place that change your basis. E-file state tax for free Some events, such as additions or permanent improvements to the property, increase basis. E-file state tax for free Others, such as earlier casualty losses and depreciation deductions, decrease basis. E-file state tax for free When you add the increases to the basis and subtract the decreases from the basis, the result is your adjusted basis. E-file state tax for free See Publication 551 for more information on figuring the basis of your property. E-file state tax for free Insurance and Other Reimbursements If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. E-file state tax for free You do not have a casualty or theft loss to the extent you are reimbursed. E-file state tax for free If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. E-file state tax for free You must reduce your loss even if you do not receive payment until a later tax year. E-file state tax for free See Reimbursement Received After Deducting Loss , later. E-file state tax for free Failure to file a claim for reimbursement. E-file state tax for free   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. E-file state tax for free Otherwise, you cannot deduct this loss as a casualty or theft. E-file state tax for free The portion of the loss usually not covered by insurance (for example, a deductible) is not subject to this rule. E-file state tax for free Example. E-file state tax for free You have a car insurance policy with a $1,000 deductible. E-file state tax for free Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the $100 and 10% rules, discussed later). E-file state tax for free This is true, even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. E-file state tax for free Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. E-file state tax for free Other types of reimbursements are discussed next. E-file state tax for free Also see the Instructions for Form 4684. E-file state tax for free Employer's emergency disaster fund. E-file state tax for free   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. E-file state tax for free Take into consideration only the amount you used to replace your destroyed or damaged property. E-file state tax for free Example. E-file state tax for free Your home was extensively damaged by a tornado. E-file state tax for free Your loss after reimbursement from your insurance company was $10,000. E-file state tax for free Your employer set up a disaster relief fund for its employees. E-file state tax for free Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. E-file state tax for free You received $4,000 from the fund and spent the entire amount on repairs to your home. E-file state tax for free In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. E-file state tax for free Your casualty loss before applying the deduction limits (discussed later) is $6,000. E-file state tax for free Cash gifts. E-file state tax for free   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. E-file state tax for free This applies even if you use the money to pay for repairs to property damaged in the disaster. E-file state tax for free Example. E-file state tax for free Your home was damaged by a hurricane. E-file state tax for free Relatives and neighbors made cash gifts to you that were excludable from your income. E-file state tax for free You used part of the cash gifts to pay for repairs to your home. E-file state tax for free There were no limits or restrictions on how you could use the cash gifts. E-file state tax for free It was an excludable gift, so the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. E-file state tax for free Insurance payments for living expenses. E-file state tax for free   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. E-file state tax for free You lose the use of your main home because of a casualty. E-file state tax for free Government authorities do not allow you access to your main home because of a casualty or threat of one. E-file state tax for free Inclusion in income. E-file state tax for free   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. E-file state tax for free Report this amount on Form 1040, line 21. E-file state tax for free However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. E-file state tax for free See Qualified disaster relief payments , later, under Disaster Area Losses. E-file state tax for free   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. E-file state tax for free Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. E-file state tax for free Generally, these expenses include the amounts you pay for the following. E-file state tax for free Renting suitable housing. E-file state tax for free Transportation. E-file state tax for free Food. E-file state tax for free Utilities. E-file state tax for free Miscellaneous services. E-file state tax for free Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. E-file state tax for free Example. E-file state tax for free As a result of a fire, you vacated your apartment for a month and moved to a motel. E-file state tax for free You normally pay $525 a month for rent. E-file state tax for free None was charged for the month the apartment was vacated. E-file state tax for free Your motel rent for this month was $1,200. E-file state tax for free You normally pay $200 a month for food. E-file state tax for free Your food expenses for the month you lived in the motel were $400. E-file state tax for free You received $1,100 from your insurance company to cover your living expenses. E-file state tax for free You determine the payment you must include in income as follows. E-file state tax for free 1. E-file state tax for free Insurance payment for living expenses $1,100 2. E-file state tax for free Actual expenses during the month you are unable to use your home because of the fire $1,600   3. E-file state tax for free Normal living expenses 725   4. E-file state tax for free Temporary increase in living expenses: Subtract line 3  from line 2 875 5. E-file state tax for free Amount of payment includible in income: Subtract line 4 from line 1 $ 225 Tax year of inclusion. E-file state tax for free   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. E-file state tax for free Example. E-file state tax for free Your main home was destroyed by a tornado in August 2011. E-file state tax for free You regained use of your home in November 2012. E-file state tax for free The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. E-file state tax for free You include this amount in income on your 2012 Form 1040. E-file state tax for free If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. E-file state tax for free Disaster relief. E-file state tax for free   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. E-file state tax for free Table 2. E-file state tax for free Deduction Limit Rules for Personal-Use and Employee Property       $100 Rule 10% Rule 2% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. E-file state tax for free Apply this rule to personal-use property after you have figured the amount of your loss. E-file state tax for free You must reduce your total casualty or theft loss by 10% of your adjusted gross income. E-file state tax for free Apply this rule to personal-use property after you reduce each loss by $100 (the $100 rule). E-file state tax for free You must reduce your total casualty or theft loss by 2% of your adjusted gross income. E-file state tax for free Apply this rule to property you used in performing services as an employee after you have figured the amount of your loss and added it to your job expenses and most other miscellaneous itemized deductions. E-file state tax for free Single Event Apply this rule only once, even if many pieces of property are affected. E-file state tax for free Apply this rule only once, even if many pieces of property are affected. E-file state tax for free Apply this rule only once, even if many pieces of property are affected. E-file state tax for free More Than One Event Apply to the loss from each event. E-file state tax for free Apply to the total of all your losses from all events. E-file state tax for free Apply to the total of all your losses from all events. E-file state tax for free More Than One Person— With Loss From the   Same Event  (other than a married couple  filing jointly) Apply separately to each person. E-file state tax for free Apply separately to each person. E-file state tax for free Apply separately to each person. E-file state tax for free Married Couple—  With Loss From the  Same Event Filing Joint Return Apply as if you were one person. E-file state tax for free Apply as if you were one person. E-file state tax for free Apply as if you were one person. E-file state tax for free Filing Separate Return Apply separately to each spouse. E-file state tax for free Apply separately to each spouse. E-file state tax for free Apply separately to each spouse. E-file state tax for free More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. E-file state tax for free Apply separately to each owner of jointly owned property. E-file state tax for free Apply separately to each owner of jointly owned property. E-file state tax for free    Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster, are not taxable income to you. E-file state tax for free For more information, see Qualified disaster relief payments under Disaster Area Losses, later. E-file state tax for free   Disaster unemployment assistance payments are unemployment benefits that are taxable. E-file state tax for free   Generally, disaster relief grants received under the Robert T. E-file state tax for free Stafford Disaster Relief and Emergency Assistance Act are not included in your income. E-file state tax for free See Federal disaster relief grants , later, under Disaster Area Losses. E-file state tax for free Loan proceeds. E-file state tax for free   Do not reduce your casualty loss by loan proceeds you use to rehabilitate or replace property on which you are claiming a casualty loss deduction. E-file state tax for free If you have a federal loan that is canceled (forgiven), see Federal loan canceled , later, under Disaster Area Losses. E-file state tax for free Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. E-file state tax for free This section explains the adjustment you may have to make. E-file state tax for free Actual reimbursement less than expected. E-file state tax for free   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. E-file state tax for free Example. E-file state tax for free Your personal car had a FMV of $2,000 when it was destroyed in a collision with another car in 2012. E-file state tax for free The accident was due to the negligence of the other driver. E-file state tax for free At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. E-file state tax for free You did not have a deductible loss in 2012. E-file state tax for free In January 2013, the court awards you a judgment of $2,000. E-file state tax for free However, in July it becomes apparent that you will be unable to collect any amount from the other driver. E-file state tax for free Since this is your only casualty or theft loss, you can deduct the loss in 2013 that is figured by applying the Deduction Limits (discussed later). E-file state tax for free Actual reimbursement more than expected. E-file state tax for free   If you later receive more reimbursement than you expected, after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. E-file state tax for free However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. E-file state tax for free You do not refigure your tax for the year you claimed the deduction. E-file state tax for free See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. E-file state tax for free Example. E-file state tax for free In 2012, a hurricane destroyed your motorboat. E-file state tax for free Your loss was $3,000, and you estimated that your insurance would cover $2,500 of it. E-file state tax for free You did not itemize deductions on your 2012 return, so you could not deduct the loss. E-file state tax for free When the insurance company reimburses you for the loss, you do not report any of the reimbursement as income. E-file state tax for free This is true even if it is for the full $3,000 because you did not deduct the loss on your 2012 return. E-file state tax for free The loss did not reduce your tax. E-file state tax for free    If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. E-file state tax for free If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. E-file state tax for free Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. E-file state tax for free You may be able to postpone reporting any remaining gain as explained under Postponement of Gain, later. E-file state tax for free Actual reimbursement same as expected. E-file state tax for free   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. E-file state tax for free Example. E-file state tax for free In December 2013, you had a collision while driving your personal car. E-file state tax for free Repairs to the car cost $950. E-file state tax for free You had $100 deductible collision insurance. E-file state tax for free Your insurance company agreed to reimburse you for the rest of the damage. E-file state tax for free Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. E-file state tax for free Due to the $100 rule, you cannot deduct the $100 you paid as the deductible. E-file state tax for free When you receive the $850 from the insurance company in 2014, do not report it as income. E-file state tax for free Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. E-file state tax for free The deduction for casualty and theft losses of employee property and personal-use property is limited. E-file state tax for free A loss on employee property is subject to the 2% rule, discussed next. E-file state tax for free With certain exceptions, a loss on property you own for your personal use is subject to the $100 and 10% rules, discussed later. E-file state tax for free The 2%, $100, and 10% rules are also summarized in Table 2 . E-file state tax for free Losses on business property (other than employee property) and income-producing property are not subject to these rules. E-file state tax for free However, if your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. E-file state tax for free See the Instructions for Form 4684, Section B. E-file state tax for free If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. E-file state tax for free 2% Rule The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040) or Form 1040NR, Schedule A, must be reduced by 2% of your adjusted gross income. E-file state tax for free Employee property is property used in performing services as an employee. E-file state tax for free $100 Rule After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce that loss by $100. E-file state tax for free This reduction applies to each total casualty or theft loss. E-file state tax for free It does not matter how many pieces of property are involved in an event. E-file state tax for free Only a single $100 reduction applies. E-file state tax for free Example. E-file state tax for free You have $750 deductible collision insurance on your car. E-file state tax for free The car is damaged in a collision. E-file state tax for free The insurance company pays you for the damage minus the $750 deductible. E-file state tax for free The amount of the casualty loss is based solely on the deductible. E-file state tax for free The casualty loss is $650 ($750 − $100) because the first $100 of a casualty loss on personal-use property is not deductible. E-file state tax for free Single event. E-file state tax for free   Generally, events closely related in origin cause a single casualty. E-file state tax for free It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. E-file state tax for free A single casualty may also damage two or more pieces of property, such as a hailstorm that damages both your home and your car parked in your driveway. E-file state tax for free Example 1. E-file state tax for free A thunderstorm destroyed your pleasure boat. E-file state tax for free You also lost some boating equipment in the storm. E-file state tax for free Your loss was $5,000 on the boat and $1,200 on the equipment. E-file state tax for free Your insurance company reimbursed you $4,500 for the damage to your boat. E-file state tax for free You had no insurance coverage on the equipment. E-file state tax for free Your casualty loss is from a single event and the $100 rule applies once. E-file state tax for free Figure your loss before applying the 10% rule (discussed later) as follows. E-file state tax for free     Boat Equipment 1. E-file state tax for free Loss $5,000 $1,200 2. E-file state tax for free Subtract insurance 4,500 -0- 3. E-file state tax for free Loss after reimbursement $ 500 $1,200 4. E-file state tax for free Total loss $1,700 5. E-file state tax for free Subtract $100 100 6. E-file state tax for free Loss before 10% rule $1,600 Example 2. E-file state tax for free Thieves broke into your home in January and stole a ring and a fur coat. E-file state tax for free You had a loss of $200 on the ring and $700 on the coat. E-file state tax for free This is a single theft. E-file state tax for free The $100 rule applies to the total $900 loss. E-file state tax for free Example 3. E-file state tax for free In September, hurricane winds blew the roof off your home. E-file state tax for free Flood waters caused by the hurricane further damaged your home and destroyed your furniture and personal car. E-file state tax for free This is considered a single casualty. E-file state tax for free The $100 rule is applied to your total loss from the flood waters and the wind. E-file state tax for free More than one loss. E-file state tax for free   If you have more than one casualty or theft loss during your tax year, you must reduce each loss by $100. E-file state tax for free Example. E-file state tax for free Your family car was damaged in an accident in January. E-file state tax for free Your loss after the insurance reimbursement was $75. E-file state tax for free In February, your car was damaged in another accident. E-file state tax for free This time your loss after the insurance reimbursement was $90. E-file state tax for free Apply the $100 rule to each separate casualty loss. E-file state tax for free Since neither accident resulted in a loss of over $100, you are not entitled to any deduction for these accidents. E-file state tax for free More than one person. E-file state tax for free   If two or more individuals (other than a husband and wife filing a joint return) have losses from the same casualty or theft, the $100 rule applies separately to each individual. E-file state tax for free Example. E-file state tax for free A fire damaged your house and also damaged the personal property of your house guest. E-file state tax for free You must reduce your loss by $100. E-file state tax for free Your house guest must reduce his or her loss by $100. E-file state tax for free Married taxpayers. E-file state tax for free   If you and your spouse file a joint return, you are treated as one individual in applying the $100 rule. E-file state tax for free It does not matter whether you own the property jointly or separately. E-file state tax for free   If you and your spouse have a casualty or theft loss and you file separate returns, each of you must reduce your loss by $100. E-file state tax for free This is true even if you own the property jointly. E-file state tax for free If one spouse owns the property, only that spouse can figure a loss deduction on a separate return. E-file state tax for free   If the casualty or theft loss is on property you own as tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. E-file state tax for free Neither of you can figure your deduction on the entire loss on a separate return. E-file state tax for free Each of you must reduce the loss by $100. E-file state tax for free More than one owner. E-file state tax for free   If two or more individuals (other than a husband and wife filing a joint return) have a loss on property jointly owned, the $100 rule applies separately to each. E-file state tax for free For example, if two sisters live together in a home they own jointly and they have a casualty loss on the home, the $100 rule applies separately to each sister. E-file state tax for free 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. E-file state tax for free Apply this rule after you reduce each loss by $100. E-file state tax for free For more information, see the Form 4684 instructions. E-file state tax for free If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. E-file state tax for free Example. E-file state tax for free In June, you discovered that your house had been burglarized. E-file state tax for free Your loss after insurance reimbursement was $2,000. E-file state tax for free Your adjusted gross income for the year you discovered the theft is $29,500. E-file state tax for free Figure your theft loss as follows. E-file state tax for free 1. E-file state tax for free Loss after insurance $2,000 2. E-file state tax for free Subtract $100 100 3. E-file state tax for free Loss after $100 rule $1,900 4. E-file state tax for free Subtract 10% of $29,500 AGI $2,950 5. E-file state tax for free Theft loss deduction $-0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($2,950). E-file state tax for free More than one loss. E-file state tax for free   If you have more than one casualty or theft loss during your tax year, reduce each loss by any reimbursement and by $100. E-file state tax for free Then you must reduce the total of all your losses by 10% of your adjusted gross income. E-file state tax for free Example. E-file state tax for free In March, you had a car accident that totally destroyed your car. E-file state tax for free You did not have collision insurance on your car, so you did not receive any insurance reimbursement. E-file state tax for free Your loss on the car was $1,800. E-file state tax for free In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items you had stored there. E-file state tax for free Your loss on the basement items after reimbursement was $2,100. E-file state tax for free Your adjusted gross income for the year that the accident and fire occurred is $25,000. E-file state tax for free You figure your casualty loss deduction as follows. E-file state tax for free     Car Basement 1. E-file state tax for free Loss $1,800 $2,100 2. E-file state tax for free Subtract $100 per incident 100 100 3. E-file state tax for free Loss after $100 rule $1,700 $2,000 4. E-file state tax for free Total loss $3,700 5. E-file state tax for free Subtract 10% of $25,000 AGI 2,500 6. E-file state tax for free Casualty loss deduction $1,200 Married taxpayers. E-file state tax for free   If you and your spouse file a joint return, you are treated as one individual in applying the 10% rule. E-file state tax for free It does not matter if you own the property jointly or separately. E-file state tax for free   If you file separate returns, the 10% rule applies to each return on which a loss is claimed. E-file state tax for free More than one owner. E-file state tax for free   If two or more individuals (other than husband and wife filing a joint return) have a loss on property that is owned jointly, the 10% rule applies separately to each. E-file state tax for free Gains and losses. E-file state tax for free   If you have casualty or theft gains as well as losses to personal-use property, you must compare your total gains to your total losses. E-file state tax for free Do this after you have reduced each loss by any reimbursements and by $100 but before you have reduced the losses by 10% of your adjusted gross income. E-file state tax for free Casualty or theft gains do not include gains you choose to postpone. E-file state tax for free See Postponement of Gain, later. E-file state tax for free Losses more than gains. E-file state tax for free   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. E-file state tax for free The rest, if any, is your deductible loss from personal-use property. E-file state tax for free Example. E-file state tax for free Your theft loss after reducing it by reimbursements and by $100 is $2,700. E-file state tax for free Your casualty gain is $700. E-file state tax for free Your loss is more than your gain, so you must reduce your $2,000 net loss ($2,700 − $700) by 10% of your adjusted gross income. E-file state tax for free Gains more than losses. E-file state tax for free   If your recognized gains are more than your losses, subtract your losses from your gains. E-file state tax for free The difference is treated as a capital gain and must be reported on Schedule D (Form 1040). E-file state tax for free The 10% rule does not apply to your gains. E-file state tax for free Example. E-file state tax for free Your theft loss is $600 after reducing it by reimbursements and by $100. E-file state tax for free Your casualty gain is $1,600. E-file state tax for free Because your gain is more than your loss, you must report the $1,000 net gain ($1,600 − $600) on Schedule D (Form 1040). E-file state tax for free More information. E-file state tax for free   For information on how to figure recognized gains, see Figuring a Gain , later. E-file state tax for free Figuring the Deduction Generally, you must figure your loss separately for each item stolen, damaged, or destroyed. E-file state tax for free However, a special rule applies to real property you own for personal use. E-file state tax for free Real property. E-file state tax for free   In figuring a loss to real estate you own for personal use, all improvements (such as buildings and ornamental trees and the land containing the improvements) are considered together. E-file state tax for free Example 1. E-file state tax for free In June, a fire destroyed your lakeside cottage, which cost $144,800 (including $14,500 for the land) several years ago. E-file state tax for free (Your land was not damaged. E-file state tax for free ) This was your only casualty or theft loss for the year. E-file state tax for free The FMV of the property immediately before the fire was $180,000 ($145,000 for the cottage and $35,000 for the land). E-file state tax for free The FMV immediately after the fire was $35,000 (value of the land). E-file state tax for free You collected $130,000 from the insurance company. E-file state tax for free Your adjusted gross income for the year the fire occurred is $80,000. E-file state tax for free Your deduction for the casualty loss is $6,700, figured in the following manner. E-file state tax for free 1. E-file state tax for free Adjusted basis of the entire property (cost in this example) $144,800 2. E-file state tax for free FMV of entire property  before fire $180,000 3. E-file state tax for free FMV of entire property after fire 35,000 4. E-file state tax for free Decrease in FMV of entire property (line 2 − line 3) $145,000 5. E-file state tax for free Loss (smaller of line 1 or line 4) $144,800 6. E-file state tax for free Subtract insurance 130,000 7. E-file state tax for free Loss after reimbursement $14,800 8. E-file state tax for free Subtract $100 100 9. E-file state tax for free Loss after $100 rule $14,700 10. E-file state tax for free Subtract 10% of $80,000 AGI 8,000 11. E-file state tax for free Casualty loss deduction $ 6,700 Example 2. E-file state tax for free You bought your home a few years ago. E-file state tax for free You paid $150,000 ($10,000 for the land and $140,000 for the house). E-file state tax for free You also spent an additional $2,000 for landscaping. E-file state tax for free This year a fire destroyed your home. E-file state tax for free The fire also damaged the shrubbery and trees in your yard. E-file state tax for free The fire was your only casualty or theft loss this year. E-file state tax for free Competent appraisers valued the property as a whole at $175,000 before the fire, but only $50,000 after the fire. E-file state tax for free Shortly after the fire, the insurance company paid you $95,000 for the loss. E-file state tax for free Your adjusted gross income for this year is $70,000. E-file state tax for free You figure your casualty loss deduction as follows. E-file state tax for free 1. E-file state tax for free Adjusted basis of the entire property (cost of land, building, and landscaping) $152,000 2. E-file state tax for free FMV of entire property  before fire $175,000 3. E-file state tax for free FMV of entire property after fire 50,000 4. E-file state tax for free Decrease in FMV of entire property (line 2 − line 3) $125,000 5. E-file state tax for free Loss (smaller of line 1 or line 4) $125,000 6. E-file state tax for free Subtract insurance 95,000 7. E-file state tax for free Loss after reimbursement $30,000 8. E-file state tax for free Subtract $100 100 9. E-file state tax for free Loss after $100 rule $29,900 10. E-file state tax for free Subtract 10% of $70,000 AGI 7,000 11. E-file state tax for free Casualty loss deduction $ 22,900 Personal property. E-file state tax for free   Personal property is any property that is not real property. E-file state tax for free If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. E-file state tax for free Then combine these separate losses to figure the total loss. E-file state tax for free Reduce the total loss by $100 and 10% of your adjusted gross income to figure the loss deduction. E-file state tax for free Example 1. E-file state tax for free In August, a storm destroyed your pleasure boat, which cost $18,500. E-file state tax for free This was your only casualty or theft loss for the year. E-file state tax for free Its FMV immediately before the storm was $17,000. E-file state tax for free You had no insurance, but were able to salvage the motor of the boat and sell it for $200. E-file state tax for free Your adjusted gross income for the year the casualty occurred is $70,000. E-file state tax for free Although the motor was sold separately, it is part of the boat and not a separate item of property. E-file state tax for free You figure your casualty loss deduction as follows. E-file state tax for free 1. E-file state tax for free Adjusted basis (cost in this example) $18,500 2. E-file state tax for free FMV before storm $17,000 3. E-file state tax for free FMV after storm 200 4. E-file state tax for free Decrease in FMV  (line 2 − line 3) $16,800 5. E-file state tax for free Loss (smaller of line 1 or line 4) $16,800 6. E-file state tax for free Subtract insurance -0- 7. E-file state tax for free Loss after reimbursement $16,800 8. E-file state tax for free Subtract $100 100 9. E-file state tax for free Loss after $100 rule $16,700 10. E-file state tax for free Subtract 10% of $70,000 AGI 7,000 11. E-file state tax for free Casualty loss deduction $ 9,700 Example 2. E-file state tax for free In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. E-file state tax for free You had bought the car for $30,000. E-file state tax for free The FMV of the car just before the accident was $17,500. E-file state tax for free Its FMV just after the accident was $180 (scrap value). E-file state tax for free Your insurance company reimbursed you $16,000. E-file state tax for free Your watch was not insured. E-file state tax for free You had purchased it for $250. E-file state tax for free Its FMV just before the accident was $500. E-file state tax for free Your adjusted gross income for the year the accident occurred is $97,000. E-file state tax for free Your casualty loss deduction is zero, figured as follows. E-file state tax for free     Car Watch 1. E-file state tax for free Adjusted basis (cost) $30,000 $250 2. E-file state tax for free FMV before accident $17,500 $500 3. E-file state tax for free FMV after accident 180 -0- 4. E-file state tax for free Decrease in FMV (line 2 − line 3) $17,320 $500 5. E-file state tax for free Loss (smaller of line 1 or line 4) $17,320 $250 6. E-file state tax for free Subtract insurance 16,000 -0- 7. E-file state tax for free Loss after reimbursement $1,320 $250 8. E-file state tax for free Total loss $1,570 9. E-file state tax for free Subtract $100 100 10. E-file state tax for free Loss after $100 rule $1,470 11. E-file state tax for free Subtract 10% of $97,000 AGI 9,700 12. E-file state tax for free Casualty loss deduction $ -0- Both real and personal properties. E-file state tax for free   When a casualty involves both real and personal properties, you must figure the loss separately for each type of property. E-file state tax for free However, you apply a single $100 reduction to the total loss. E-file state tax for free Then, you apply the 10% rule to figure the casualty loss deduction. E-file state tax for free Example. E-file state tax for free In July, a hurricane damaged your home, which cost you $164,000 including land. E-file state tax for free The FMV of the property (both building and land) immediately before the storm was $170,000 and its FMV immediately after the storm was $100,000. E-file state tax for free Your household furnishings were also damaged. E-file state tax for free You separately figured the loss on each damaged household item and arrived at a total loss of $600. E-file state tax for free You collected $50,000 from the insurance company for the damage to your home, but your household furnishings were not insured. E-file state tax for free Your adjusted gross income for the year the hurricane occurred is $65,000. E-file state tax for free You figure your casualty loss deduction from the hurricane in the following manner. E-file state tax for free 1. E-file state tax for free Adjusted basis of real property (cost in this example) $164,000 2. E-file state tax for free FMV of real property before hurricane $170,000 3. E-file state tax for free FMV of real property after hurricane 100,000 4. E-file state tax for free Decrease in FMV of real property (line 2 − line 3) $70,000 5. E-file state tax for free Loss on real property (smaller of line 1 or line 4) $70,000 6. E-file state tax for free Subtract insurance 50,000 7. E-file state tax for free Loss on real property after reimbursement $20,000 8. E-file state tax for free Loss on furnishings $600 9. E-file state tax for free Subtract insurance -0- 10. E-file state tax for free Loss on furnishings after reimbursement $600 11. E-file state tax for free Total loss (line 7 plus line 10) $20,600 12. E-file state tax for free Subtract $100 100 13. E-file state tax for free Loss after $100 rule $20,500 14. E-file state tax for free Subtract 10% of $65,000 AGI 6,500 15. E-file state tax for free Casualty loss deduction $14,000 Property used partly for business and partly for personal purposes. E-file state tax for free   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use portion and for the business or income-producing portion. E-file state tax for free You must figure each loss separately because the losses attributed to these two uses are figured in two different ways. E-file state tax for free When figuring each loss, allocate the total cost or basis, the FMV before and after the casualty or theft loss, and the insurance or other reimbursement between the business and personal use of the property. E-file state tax for free The $100 rule and the 10% rule apply only to the casualty or theft loss on the personal-use portion of the property. E-file state tax for free Example. E-file state tax for free You own a building that you constructed on leased land. E-file state tax for free You use half of the building for your business and you live in the other half. E-file state tax for free The cost of the building was $400,000. E-file state tax for free You made no further improvements or additions to it. E-file state tax for free A flood in March damaged the entire building. E-file state tax for free The FMV of the building was $380,000 immediately before the flood and $320,000 afterwards. E-file state tax for free Your insurance company reimbursed you $40,000 for the flood damage. E-file state tax for free Depreciation on the business part of the building before the flood totaled $24,000. E-file state tax for free Your adjusted gross income for the year the flood occurred is $125,000. E-file state tax for free You have a deductible business casualty loss of $10,000. E-file state tax for free You do not have a deductible personal casualty loss because of the 10% rule. E-file state tax for free You figure your loss as follows. E-file state tax for free     Business   Personal     Part   Part 1. E-file state tax for free Cost (total $400,000) $200,000   $200,000 2. E-file state tax for free Subtract depreciation 24,000   -0- 3. E-file state tax for free Adjusted basis $176,000   $200,000 4. E-file state tax for free FMV before flood (total $380,000) $190,000   $190,000 5. E-file state tax for free FMV after flood (total $320,000) 160,000   160,000 6. E-file state tax for free Decrease in FMV  (line 4 − line 5) $30,000   $30,000 7. E-file state tax for free Loss (smaller of line 3 or line 6) $30,000   $30,000 8. E-file state tax for free Subtract insurance 20,000   20,000 9. E-file state tax for free Loss after reimbursement $10,000   $10,000 10. E-file state tax for free Subtract $100 on personal-use property -0-   100 11. E-file state tax for free Loss after $100 rule $10,000   $9,900 12. E-file state tax for free Subtract 10% of $125,000 AGI on personal-use property -0-   12,500 13. E-file state tax for free Deductible business loss $10,000     14. E-file state tax for free Deductible personal loss $-0- Figuring a Gain If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. E-file state tax for free Your gain is figured as follows. E-file state tax for free The amount you receive (discussed next), minus Your adjusted basis in the property at the time of the casualty or theft. E-file state tax for free See Adjusted Basis , earlier, for information on adjusted basis. E-file state tax for free Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. E-file state tax for free Amount you receive. E-file state tax for free   The amount you receive includes any money plus the value of any property you receive minus any expenses you have in obtaining reimbursement. E-file state tax for free It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. E-file state tax for free Example. E-file state tax for free A hurricane destroyed your personal residence and the insurance company awarded you $145,000. E-file state tax for free You received $140,000 in cash. E-file state tax for free The remaining $5,000 was paid directly to the holder of a mortgage on the property. E-file state tax for free The amount you received includes the $5,000 reimbursement paid on the mortgage. E-file state tax for free Main home destroyed. E-file state tax for free   If you have a gain because your main home was destroyed, you generally can exclude the gain from your income as if you had sold or exchanged your home. E-file state tax for free You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). E-file state tax for free To exclude a gain, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date it was destroyed. E-file state tax for free For information on this exclusion, see Publication 523. E-file state tax for free If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. E-file state tax for free See Postponement of Gain , later. E-file state tax for free Reporting a gain. E-file state tax for free   You generally must report your gain as income in the year you receive the reimbursement. E-file state tax for free However, you do not have to report your gain if you meet certain requirements and choose to postpone reporting the gain according to the rules explained under Postponement of Gain, next. E-file state tax for free   For information on how to report a gain, see How To Report Gains and Losses , later. E-file state tax for free    If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, do not consider the gain you are postponing when figuring your casualty or theft loss deduction. E-file state tax for free See 10% Rule under Deduction Limits, earlier. E-file state tax for free Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. E-file state tax for free Your basis in the new property is generally the same as your adjusted basis in the property it replaces. E-file state tax for free You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. E-file state tax for free However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. E-file state tax for free You also can choose to postpone reporting the gain if you purchase a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the property. E-file state tax for free See Controlling interest in a corporation , later. E-file state tax for free If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. E-file state tax for free To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. E-file state tax for free If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. E-file state tax for free Example. E-file state tax for free In 1970, you bought an oceanfront cottage for your personal use at a cost of $18,000. E-file state tax for free You made no further improvements or additions to it. E-file state tax for free When a storm destroyed the cottage this January, the cottage was worth $250,000. E-file state tax for free You received $146,000 from the insurance company in March. E-file state tax for free You had a gain of $128,000 ($146,000 − $18,000). E-file state tax for free You spent $144,000 to rebuild the cottage. E-file state tax for free Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. E-file state tax for free Buying replacement property from a related person. E-file state tax for free   You cannot postpone reporting a gain from a casualty or theft if you buy the replacement property from a related person (discussed later). E-file state tax for free This rule applies to the following taxpayers. E-file state tax for free C corporations. E-file state tax for free Partnerships in which more than 50% of the capital or profits interests is owned by C corporations. E-file state tax for free All others (including individuals, partnerships — other than those in (2) — and S corporations) if the total realized gain for the tax year on all destroyed or stolen properties on which there are realized gains is more than $100,000. E-file state tax for free For casualties and thefts described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. E-file state tax for free If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. E-file state tax for free If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. E-file state tax for free Exception. E-file state tax for free   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the destroyed or stolen property. E-file state tax for free Related persons. E-file state tax for free   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. E-file state tax for free For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. E-file state tax for free Death of a taxpayer. E-file state tax for free   If a taxpayer dies after having a gain but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. E-file state tax for free The executor of the estate or the person succeeding to the funds from the casualty or theft cannot postpone reporting the gain by buying replacement property. E-file state tax for free Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. E-file state tax for free Property you acquire as a gift or inheritance does not qualify. E-file state tax for free You do not have to use the same funds you receive as
Español

Defense Technical Information Center

The Defense Technical Information Center serves the Department of Defense as a repository of government funded scientific, technical, engineering and business related inormation.

Contact the Agency or Department

Website: Defense Technical Information Center

Contact In-Person: Directions

E-mail:

Address: 8725 John J Kingman Rd
Suite 0944

Ft Belvoir, VA 22060-6218

Phone Number: (703) 767-8274

Toll-free: (800) 225-3842

The E-file State Tax For Free

E-file state tax for free 11. E-file state tax for free   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. E-file state tax for free Nondeductible losses. E-file state tax for free Family pet. E-file state tax for free Progressive deterioration. E-file state tax for free Decline in market value of stock. E-file state tax for free Mislaid or lost property. E-file state tax for free Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. E-file state tax for free Related persons. E-file state tax for free Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. E-file state tax for free Covered disaster area. E-file state tax for free Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. E-file state tax for free A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. E-file state tax for free A theft occurs when property is stolen. E-file state tax for free A condemnation occurs when private property is legally taken for public use without the owner's consent. E-file state tax for free A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. E-file state tax for free You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. E-file state tax for free An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. E-file state tax for free If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. E-file state tax for free For more information, see Postponing Gain , later. E-file state tax for free Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. E-file state tax for free Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. E-file state tax for free If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. E-file state tax for free Casualty. E-file state tax for free   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. E-file state tax for free A sudden event is one that is swift, not gradual or progressive. E-file state tax for free An unexpected event is one that is ordinarily unanticipated and unintended. E-file state tax for free 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. E-file state tax for free Deductible losses. E-file state tax for free   Deductible casualty losses can result from a number of different causes, including the following. E-file state tax for free Airplane crashes. E-file state tax for free Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. E-file state tax for free Earthquakes. E-file state tax for free Fires (but see Nondeductible losses next for exceptions). E-file state tax for free Floods. E-file state tax for free Freezing. E-file state tax for free Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. E-file state tax for free Lightning. E-file state tax for free Storms, including hurricanes and tornadoes. E-file state tax for free Terrorist attacks. E-file state tax for free Vandalism. E-file state tax for free Volcanic eruptions. E-file state tax for free Nondeductible losses. E-file state tax for free   A casualty loss is not deductible if the damage or destruction is caused by the following. E-file state tax for free Accidentally breaking articles such as glassware or china under normal conditions. E-file state tax for free A family pet (explained below). E-file state tax for free A fire if you willfully set it, or pay someone else to set it. E-file state tax for free A car, truck, or farm equipment accident if your willful negligence or willful act caused it. E-file state tax for free The same is true if the willful act or willful negligence of someone acting for you caused the accident. E-file state tax for free Progressive deterioration (explained below). E-file state tax for free Family pet. E-file state tax for free   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. E-file state tax for free Example. E-file state tax for free You keep your horse in your yard. E-file state tax for free The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. E-file state tax for free Some of the trees were completely girdled and died. E-file state tax for free Because the damage was not unexpected or unusual, the loss is not deductible. E-file state tax for free Progressive deterioration. E-file state tax for free   Loss of property due to progressive deterioration is not deductible as a casualty loss. E-file state tax for free This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. E-file state tax for free Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. E-file state tax for free However, weather-related conditions or disease may cause another type of involuntary conversion. E-file state tax for free See Other Involuntary Conversions , later. E-file state tax for free Theft. E-file state tax for free   A theft is the taking and removing of money or property with the intent to deprive the owner of it. E-file state tax for free The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. E-file state tax for free You do not need to show a conviction for theft. E-file state tax for free   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. E-file state tax for free The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. E-file state tax for free Decline in market value of stock. E-file state tax for free   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. E-file state tax for free However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. E-file state tax for free You report a capital loss on Schedule D (Form 1040). E-file state tax for free For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. E-file state tax for free Mislaid or lost property. E-file state tax for free   The simple disappearance of money or property is not a theft. E-file state tax for free However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. E-file state tax for free Example. E-file state tax for free A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. E-file state tax for free The diamond falls from the ring and is never found. E-file state tax for free The loss of the diamond is a casualty. E-file state tax for free Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. E-file state tax for free The following is a discussion of some losses you can deduct and some you cannot deduct. E-file state tax for free Livestock or produce bought for resale. E-file state tax for free   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. E-file state tax for free If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. E-file state tax for free You cannot take a separate deduction. E-file state tax for free Livestock, plants, produce, and crops raised for sale. E-file state tax for free   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. E-file state tax for free You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. E-file state tax for free   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. E-file state tax for free You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. E-file state tax for free The uniform capitalization rules are discussed in chapter 6. E-file state tax for free   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. E-file state tax for free You get the deduction by omitting the item from your inventory at the close of your tax year. E-file state tax for free You cannot take a separate casualty or theft deduction. E-file state tax for free Income loss. E-file state tax for free   A loss of future income is not deductible. E-file state tax for free Example. E-file state tax for free A severe flood destroyed your crops. E-file state tax for free Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . E-file state tax for free You estimate that the crop loss will reduce your farm income by $25,000. E-file state tax for free This loss of future income is also not deductible. E-file state tax for free Loss of timber. E-file state tax for free   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. E-file state tax for free If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. E-file state tax for free See Postponing Gain , later. E-file state tax for free Property used in farming. E-file state tax for free   Casualty and theft losses of property used in your farm business usually result in deductible losses. E-file state tax for free If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. E-file state tax for free See How To Figure a Loss , later. E-file state tax for free Raised draft, breeding, dairy, or sporting animals. E-file state tax for free   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. E-file state tax for free However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. E-file state tax for free You use inventories to determine your income and you included the animals in your inventory. E-file state tax for free You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. E-file state tax for free When you include livestock in inventory, its last inventory value is its basis. E-file state tax for free When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. E-file state tax for free You cannot take a separate deduction. E-file state tax for free How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. E-file state tax for free Farm property. E-file state tax for free   Farm property is the property you use in your farming business. E-file state tax for free If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. E-file state tax for free   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. E-file state tax for free However, the deduction limits, discussed later, do not apply to farm property. E-file state tax for free Personal-use property. E-file state tax for free   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. E-file state tax for free The following items are examples of personal-use property: Your main home. E-file state tax for free Furniture and electronics used in your main home and not used in a home office or for business purposes. E-file state tax for free Clothing and jewelry. E-file state tax for free An automobile used for nonbusiness purposes. E-file state tax for free You figure the casualty or theft loss on this property by taking the following steps. E-file state tax for free Determine your adjusted basis in the property before the casualty or theft. E-file state tax for free Determine the decrease in fair market value of the property as a result of the casualty or theft. E-file state tax for free From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. E-file state tax for free You must apply the deduction limits, discussed later, to determine your deductible loss. E-file state tax for free    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. E-file state tax for free It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. E-file state tax for free Adjusted basis. E-file state tax for free   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. E-file state tax for free For more information about adjusted basis, see chapter 6. E-file state tax for free Decrease in fair market value (FMV). E-file state tax for free   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. E-file state tax for free FMV is defined in chapter 10 under Payments Received or Considered Received . E-file state tax for free Appraisal. E-file state tax for free   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. E-file state tax for free But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. E-file state tax for free   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. E-file state tax for free The appraiser must recognize the effects of any general market decline that may occur along with the casualty. E-file state tax for free This information is needed to limit any deduction to the actual loss resulting from damage to the property. E-file state tax for free Cost of cleaning up or making repairs. E-file state tax for free   The cost of cleaning up after a casualty is not part of a casualty loss. E-file state tax for free Neither is the cost of repairing damaged property after a casualty. E-file state tax for free But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. E-file state tax for free The repairs are actually made. E-file state tax for free The repairs are necessary to bring the property back to its condition before the casualty. E-file state tax for free The amount spent for repairs is not excessive. E-file state tax for free The repairs fix the damage only. E-file state tax for free The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. E-file state tax for free Related expenses. E-file state tax for free   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. E-file state tax for free However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. E-file state tax for free Separate computations for more than one item of property. E-file state tax for free   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. E-file state tax for free Then combine the losses to determine your total loss. E-file state tax for free    There is an exception to this rule for personal-use real property. E-file state tax for free See Exception for personal-use real property, later. E-file state tax for free Example. E-file state tax for free A fire on your farm damaged a tractor and the barn in which it was stored. E-file state tax for free The tractor had an adjusted basis of $3,300. E-file state tax for free Its FMV was $28,000 just before the fire and $10,000 immediately afterward. E-file state tax for free The barn had an adjusted basis of $28,000. E-file state tax for free Its FMV was $55,000 just before the fire and $25,000 immediately afterward. E-file state tax for free You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. E-file state tax for free Figure your deductible casualty loss separately for the two items of property. E-file state tax for free     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. E-file state tax for free   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. E-file state tax for free Figure the loss using the smaller of the following. E-file state tax for free The decrease in FMV of the entire property. E-file state tax for free The adjusted basis of the entire property. E-file state tax for free Example. E-file state tax for free You bought a farm in 1990 for $160,000. E-file state tax for free The adjusted basis of the residential part is now $128,000. E-file state tax for free In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. E-file state tax for free The adjusted basis of the residential part includes the $7,500. E-file state tax for free The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. E-file state tax for free The trees were not covered by insurance. E-file state tax for free 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. E-file state tax for free   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. E-file state tax for free You do not have a casualty or theft loss to the extent you are reimbursed. E-file state tax for free   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. E-file state tax for free You must reduce your loss even if you do not receive payment until a later tax year. E-file state tax for free    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. E-file state tax for free You may have to include a portion of these payments in your income. E-file state tax for free See Insurance payments for living expenses in Publication 547 for details. E-file state tax for free Disaster relief. E-file state tax for free   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. E-file state tax for free Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. E-file state tax for free   Generally, disaster relief grants received under the Robert T. E-file state tax for free Stafford Disaster Relief and Emergency Assistance Act are not included in your income. E-file state tax for free See Federal disaster relief grants , later, under Disaster Area Losses . E-file state tax for free   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. E-file state tax for free See Qualified disaster relief payments , later, under Disaster Area Losses . E-file state tax for free Reimbursement received after deducting loss. E-file state tax for free   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. E-file state tax for free Actual reimbursement less than expected. E-file state tax for free   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. E-file state tax for free Actual reimbursement more than expected. E-file state tax for free   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. E-file state tax for free However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. E-file state tax for free Do not refigure your tax for the year you claimed the deduction. E-file state tax for free See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. E-file state tax for free If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. E-file state tax for free See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. E-file state tax for free Actual reimbursement same as expected. E-file state tax for free   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. E-file state tax for free Lump-sum reimbursement. E-file state tax for free   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. E-file state tax for free Figure the gain or loss separately for each asset that has a separate basis. E-file state tax for free Adjustments to basis. E-file state tax for free   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. E-file state tax for free The result is your adjusted basis in the property. E-file state tax for free Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. E-file state tax for free See Adjusted Basis in chapter 6 for more information. E-file state tax for free Example. E-file state tax for free You built a new silo for $25,000. E-file state tax for free This is the basis in your silo because that is the total cost you incurred to build it. E-file state tax for free During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. E-file state tax for free In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. E-file state tax for free Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). E-file state tax for free Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). E-file state tax for free There are two limits on the deduction for casualty or theft loss of personal-use property. E-file state tax for free You figure these limits on Form 4684. E-file state tax for free $100 rule. E-file state tax for free   You must reduce each casualty or theft loss on personal-use property by $100. E-file state tax for free This rule applies after you have subtracted any reimbursement. E-file state tax for free 10% rule. E-file state tax for free   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. E-file state tax for free Apply this rule after you reduce each loss by $100. E-file state tax for free Adjusted gross income is on line 38 of Form 1040. E-file state tax for free Example. E-file state tax for free In June, you discovered that your house had been burglarized. E-file state tax for free Your loss after insurance reimbursement was $2,000. E-file state tax for free Your adjusted gross income for the year you discovered the burglary is $57,000. E-file state tax for free Figure your theft loss deduction as follows: 1. E-file state tax for free Loss after insurance $2,000 2. E-file state tax for free Subtract $100 100 3. E-file state tax for free Loss after $100 rule $1,900 4. E-file state tax for free Subtract 10% (. E-file state tax for free 10) × $57,000 AGI $5,700 5. E-file state tax for free Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). E-file state tax for free    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. E-file state tax for free See 10% Rule in Publication 547. E-file state tax for free When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. E-file state tax for free You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. E-file state tax for free However, losses in federally declared disaster areas are subject to different rules. E-file state tax for free See Disaster Area Losses , later, for an exception. E-file state tax for free If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. E-file state tax for free Leased property. E-file state tax for free   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. E-file state tax for free This is true even if the loss occurred or the liability was paid in a different year. E-file state tax for free You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. E-file state tax for free Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. E-file state tax for free Example. E-file state tax for free Robert leased a tractor from First Implement, Inc. E-file state tax for free , for use in his farm business. E-file state tax for free The tractor was destroyed by a tornado in June 2012. E-file state tax for free The loss was not insured. E-file state tax for free First Implement billed Robert for the fair market value of the tractor on the date of the loss. E-file state tax for free Robert disagreed with the bill and refused to pay it. E-file state tax for free First Implement later filed suit in court against Robert. E-file state tax for free In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. E-file state tax for free Robert paid $20,000 in June 2013. E-file state tax for free He can claim the $20,000 as a loss on his 2013 tax return. E-file state tax for free Net operating loss (NOL). E-file state tax for free   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. E-file state tax for free An NOL can be carried back or carried forward and deducted from income in other years. E-file state tax for free See Publication 536 for more information on NOLs. E-file state tax for free Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. E-file state tax for free You must have records to support the amount you claim for the loss. E-file state tax for free Casualty loss proof. E-file state tax for free   For a casualty loss, your records should show all the following information. E-file state tax for free The type of casualty (car accident, fire, storm, etc. E-file state tax for free ) and when it occurred. E-file state tax for free That the loss was a direct result of the casualty. E-file state tax for free That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. E-file state tax for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. E-file state tax for free Theft loss proof. E-file state tax for free   For a theft loss, your records should show all the following information. E-file state tax for free When you discovered your property was missing. E-file state tax for free That your property was stolen. E-file state tax for free That you were the owner of the property. E-file state tax for free Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. E-file state tax for free Figuring a Gain A casualty or theft may result in a taxable gain. E-file state tax for free If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. E-file state tax for free You generally report your gain as income in the year you receive the reimbursement. E-file state tax for free However, depending on the type of property you receive, you may not have to report your gain. E-file state tax for free See Postponing Gain , later. E-file state tax for free Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. E-file state tax for free Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. E-file state tax for free Amount you receive. E-file state tax for free   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. E-file state tax for free It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. E-file state tax for free Example. E-file state tax for free A tornado severely damaged your barn. E-file state tax for free The adjusted basis of the barn was $25,000. E-file state tax for free Your insurance company reimbursed you $40,000 for the damaged barn. E-file state tax for free However, you had legal expenses of $2,000 to collect that insurance. E-file state tax for free Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. E-file state tax for free 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. E-file state tax for free Some of these are discussed in the following paragraphs. E-file state tax for free Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. E-file state tax for free You report the gain or deduct the loss on your tax return for the year you realize it. E-file state tax for free However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. E-file state tax for free See Postponing Gain , later. E-file state tax for free Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. E-file state tax for free The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. E-file state tax for free The owner receives a condemnation award (money or property) in exchange for the property taken. E-file state tax for free A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. E-file state tax for free Threat of condemnation. E-file state tax for free   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. E-file state tax for free Main home condemned. E-file state tax for free   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. E-file state tax for free For information on this exclusion, see Publication 523. E-file state tax for free If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. E-file state tax for free See Postponing Gain , later. E-file state tax for free (You cannot deduct a loss from the condemnation of your main home. E-file state tax for free ) More information. E-file state tax for free   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. E-file state tax for free Also see Postponing Gain , later, to find out if you can postpone reporting the gain. E-file state tax for free Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. E-file state tax for free Livestock Losses Diseased livestock. E-file state tax for free   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. E-file state tax for free If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . E-file state tax for free Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. E-file state tax for free If you replace the livestock, you may be able to postpone reporting the gain. E-file state tax for free See Postponing Gain below. E-file state tax for free Reporting dispositions of diseased livestock. E-file state tax for free   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. E-file state tax for free You must also include other information on this statement. E-file state tax for free See How To Postpone Gain , later, under Postponing Gain . E-file state tax for free Weather-related sales of livestock. E-file state tax for free   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. E-file state tax for free Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. E-file state tax for free Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. E-file state tax for free If you replace the livestock, you may be able to postpone reporting the gain. E-file state tax for free See Postponing Gain below. E-file state tax for free Example. E-file state tax for free It is your usual business practice to sell five of your dairy animals during the year. E-file state tax for free This year you sold 20 dairy animals because of drought. E-file state tax for free The sale of 15 animals is treated as an involuntary conversion. E-file state tax for free    If you do not replace the livestock, you may be able to report the gain in the following year's income. E-file state tax for free This rule also applies to other livestock (including poultry). E-file state tax for free See Sales Caused by Weather-Related Conditions in chapter 3. E-file state tax for free Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. E-file state tax for free Treat the loss as a loss from an involuntary conversion. E-file state tax for free The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. E-file state tax for free You deduct the loss on the return for the year the seedlings died. E-file state tax for free Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. E-file state tax for free Your basis in the new property is generally the same as your adjusted basis in the property it replaces. E-file state tax for free You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. E-file state tax for free However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. E-file state tax for free If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. E-file state tax for free To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. E-file state tax for free If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. E-file state tax for free Example 1. E-file state tax for free In 1985, you constructed a barn to store farm equipment at a cost of $20,000. E-file state tax for free In 1987, you added a silo to the barn at a cost of $15,000 to store grain. E-file state tax for free In May of this year, the property was worth $100,000. E-file state tax for free In June the barn and silo were destroyed by a tornado. E-file state tax for free At the time of the tornado, you had an adjusted basis of $0 in the property. E-file state tax for free You received $85,000 from the insurance company. E-file state tax for free You had a gain of $85,000 ($85,000 – $0). E-file state tax for free You spent $80,000 to rebuild the barn and silo. E-file state tax for free Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. E-file state tax for free Example 2. E-file state tax for free In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. E-file state tax for free You made no further improvements or additions to it. E-file state tax for free When a storm destroyed the cabin this January, the cabin was worth $250,000. E-file state tax for free You received $146,000 from the insurance company in March. E-file state tax for free You had a gain of $128,000 ($146,000 − $18,000). E-file state tax for free You spent $144,000 to rebuild the cabin. E-file state tax for free Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. E-file state tax for free Buying replacement property from a related person. E-file state tax for free   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). E-file state tax for free This rule applies to the following taxpayers. E-file state tax for free C corporations. E-file state tax for free Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. E-file state tax for free Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. E-file state tax for free For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. E-file state tax for free If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. E-file state tax for free If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. E-file state tax for free Exception. E-file state tax for free   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. E-file state tax for free Related persons. E-file state tax for free   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. E-file state tax for free For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. E-file state tax for free Death of a taxpayer. E-file state tax for free   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. E-file state tax for free The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. E-file state tax for free Replacement Property You must buy replacement property for the specific purpose of replacing your property. E-file state tax for free Your replacement property must be similar or related in service or use to the property it replaces. E-file state tax for free You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. E-file state tax for free If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. E-file state tax for free Property you acquire by gift or inheritance does not qualify as replacement property. E-file state tax for free Owner-user. E-file state tax for free   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. E-file state tax for free Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. E-file state tax for free A grinding mill that replaces a tractor does not qualify. E-file state tax for free Neither does a breeding or draft animal that replaces a dairy cow. E-file state tax for free Soil or other environmental contamination. E-file state tax for free   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. E-file state tax for free Weather-related conditions. E-file state tax for free   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. E-file state tax for free Example. E-file state tax for free Each year you normally sell 25 cows from your beef herd. E-file state tax for free However, this year you had to sell 50 cows. E-file state tax for free This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. E-file state tax for free Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. E-file state tax for free Standing crop destroyed by casualty. E-file state tax for free   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. E-file state tax for free The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). E-file state tax for free In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. E-file state tax for free Timber loss. E-file state tax for free   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. E-file state tax for free If you bought the standing timber within the replacement period, you can postpone reporting the gain. E-file state tax for free Business or income-producing property located in a federally declared disaster area. E-file state tax for free   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. E-file state tax for free For more information, see Disaster Area Losses in Publication 547. E-file state tax for free Substituting replacement property. E-file state tax for free   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. E-file state tax for free This is true even if you acquire the other property within the replacement period. E-file state tax for free However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. E-file state tax for free Basis of replacement property. E-file state tax for free   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. E-file state tax for free In this way, tax on the gain is postponed until you dispose of the replacement property. E-file state tax for free Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. E-file state tax for free This is the replacement period. E-file state tax for free The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. E-file state tax for free The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. E-file state tax for free Example. E-file state tax for free You are a calendar year taxpayer. E-file state tax for free While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. E-file state tax for free You discovered the theft when you returned to your farm on November 11, 2012. E-file state tax for free Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. E-file state tax for free You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. E-file state tax for free Main home in disaster area. E-file state tax for free   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. E-file state tax for free See Disaster Area Losses , later. E-file state tax for free Property in the Midwestern disaster areas. E-file state tax for free   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. E-file state tax for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. E-file state tax for free Property in the Kansas disaster area. E-file state tax for free   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. E-file state tax for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. E-file state tax for free Property in the Hurricane Katrina disaster area. E-file state tax for free   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. E-file state tax for free This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. E-file state tax for free Weather-related sales of livestock in an area eligible for federal assistance. E-file state tax for free   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. E-file state tax for free The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. E-file state tax for free   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. E-file state tax for free R. E-file state tax for free B. E-file state tax for free 529, available at  www. E-file state tax for free irs. E-file state tax for free gov/irb/2006-39_IRB/ar11. E-file state tax for free html. E-file state tax for free For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. E-file state tax for free gov. E-file state tax for free Condemnation. E-file state tax for free   The replacement period for a condemnation begins on the earlier of the following dates. E-file state tax for free The date on which you disposed of the condemned property. E-file state tax for free The date on which the threat of condemnation began. E-file state tax for free The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. E-file state tax for free But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. E-file state tax for free Business or investment real property. E-file state tax for free   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. E-file state tax for free Extension. E-file state tax for free   You can apply for an extension of the replacement period. E-file state tax for free Send your written application to the Internal Revenue Service Center where you file your tax return. E-file state tax for free See your tax return instructions for the address. E-file state tax for free Include all the details about your need for an extension. E-file state tax for free Make your application before the end of the replacement period. E-file state tax for free However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. E-file state tax for free You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. E-file state tax for free How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. E-file state tax for free You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. E-file state tax for free Required statement. E-file state tax for free   You should attach a statement to your return for the year you have the gain. E-file state tax for free This statement should include all the following information. E-file state tax for free The date and details of the casualty, theft, or other involuntary conversion. E-file state tax for free The insurance or other reimbursement you received. E-file state tax for free How you figured the gain. E-file state tax for free Replacement property acquired before return filed. E-file state tax for free   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. E-file state tax for free The replacement property. E-file state tax for free The postponed gain. E-file state tax for free The basis adjustment that reflects the postponed gain. E-file state tax for free Any gain you are reporting as income. E-file state tax for free Replacement property acquired after return filed. E-file state tax for free   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. E-file state tax for free   You should then attach another statement to your return for the year in which you buy the replacement property. E-file state tax for free This statement should contain detailed information on the replacement property. E-file state tax for free If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. E-file state tax for free Include in the statement detailed information on the replacement property bought in that year. E-file state tax for free Reporting weather-related sales of livestock. E-file state tax for free   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. E-file state tax for free Evidence of the weather-related conditions that forced the sale or exchange of the livestock. E-file state tax for free The gain realized on the sale or exchange. E-file state tax for free The number and kind of livestock sold or exchanged. E-file state tax for free The number of livestock of each kind you would have sold or exchanged under your usual business practice. E-file state tax for free   Show all the following information and the preceding information on the return for the year in which you replace the livestock. E-file state tax for free The dates you bought the replacement property. E-file state tax for free The cost of the replacement property. E-file state tax for free Description of the replacement property (for example, the number and kind of the replacement livestock). E-file state tax for free Amended return. E-file state tax for free   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. E-file state tax for free You do not acquire replacement property within the replacement period, plus extensions. E-file state tax for free On this amended return, you must report the gain and pay any additional tax due. E-file state tax for free You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. E-file state tax for free On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. E-file state tax for free Disaster Area Losses Special rules apply to federally declared disaster area losses. E-file state tax for free A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. E-file state tax for free Stafford Disaster Relief and Emergency Assistance Act. E-file state tax for free It includes a major disaster or emergency declaration under the act. E-file state tax for free A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. E-file state tax for free fema. E-file state tax for free gov. E-file state tax for free This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. E-file state tax for free For other special rules, see Disaster Area Losses in Publication 547. E-file state tax for free When to deduct the loss. E-file state tax for free   You generally must deduct a casualty loss in the year it occurred. E-file state tax for free However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. E-file state tax for free If you make this choice, the loss is treated as having occurred in the preceding year. E-file state tax for free    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. E-file state tax for free   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. E-file state tax for free The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. E-file state tax for free The due date (with extensions) for the return for the preceding tax year. E-file state tax for free Federal disaster relief grants. E-file state tax for free   Do not include post-disaster relief grants received under the Robert T. E-file state tax for free Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. E-file state tax for free Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. E-file state tax for free If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. E-file state tax for free Unemployment assistance payments under the Act are taxable unemployment compensation. E-file state tax for free Qualified disaster relief payments. E-file state tax for free   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. E-file state tax for free These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). E-file state tax for free No withholding applies to these payments. E-file state tax for free   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. E-file state tax for free Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. E-file state tax for free Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. E-file state tax for free (A personal residence can be a rented residence or one you own. E-file state tax for free ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. E-file state tax for free   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. E-file state tax for free    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. E-file state tax for free Qualified disaster mitigation payments. E-file state tax for free   Qualified disaster mitigation payments made under the Robert T. E-file state tax for free Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. E-file state tax for free These are payments you, as a property owner, receive to reduce the risk of future damage to your property. E-file state tax for free You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. E-file state tax for free Sale of property under hazard mitigation program. E-file state tax for free   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. E-file state tax for free You report the gain or deduct the loss on your tax return for the year you realize it. E-file state tax for free (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. E-file state tax for free ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. E-file state tax for free See Postponing Gain , earlier, for the rules that apply. E-file state tax for free Other federal assistance programs. E-file state tax for free    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. E-file state tax for free Postponed tax deadlines. E-file state tax for free   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. E-file state tax for free The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. E-file state tax for free   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). E-file state tax for free Go to http://www. E-file state tax for free irs. E-file state tax for free gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. E-file state tax for free Who is eligible. E-file state tax for free   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. E-file state tax for free Any individual whose main home is located in a covered disaster area (defined next). E-file state tax for free Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. E-file state tax for free Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. E-file state tax for free Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. E-file state tax for free The main home or principal place of business does not have to be located in the covered disaster area. E-file state tax for free Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. E-file state tax for free The spouse on a joint return with a taxpayer who is eligible for postponements. E-file state tax for free Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. E-file state tax for free Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. E-file state tax for free Any other person determined by the IRS to be affected by a federally declared disaster. E-file state tax for free Covered disaster area. E-file state tax for free   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. E-file state tax for free Abatement of interest and penalties. E-file state tax for free   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. E-file state tax for free Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. E-file state tax for free Form 4684. E-file state tax for free   Use this form to report your gains and losses from casualties and thefts. E-file state tax for free Form 4797. E-file state tax for free   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. E-file state tax for free Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. E-file state tax for free Form 8949. E-file state tax for free   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. E-file state tax for free Schedule A (Form 1040). E-file state tax for free   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. E-file state tax for free Schedule D (Form 1040). E-file state tax for free   Use this form to carry over the following gains. E-file state tax for free Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. E-file state tax for free Net gain shown on Form 4684 from the casualty or theft of personal-use property. E-file state tax for free    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. E-file state tax for free Schedule F (Form 1040). E-file state tax for free   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. E-file state tax for free Prev  Up  Next   Home   More Online Publications