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My Pay Gov

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My Pay Gov

My pay gov 25. My pay gov   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. My pay gov Progressive deterioration. My pay gov Damage from corrosive drywall. My pay gov Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses What's New New Section C of Form 4684 for Ponzi-type investment schemes. My pay gov  Section C of Form 4684 is new for 2013. My pay gov You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. My pay gov Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. My pay gov You do not need to complete Appendix A. My pay gov For details, see Losses from Ponzi-type investment schemes , in this chapter. My pay gov Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. My pay gov The chapter also explains the following  topics. My pay gov How to figure the amount of your loss. My pay gov How to treat insurance and other reimbursements you receive. My pay gov The deduction limits. My pay gov When and how to report a casualty or theft. My pay gov Forms to file. My pay gov    When you have a casualty or theft, you have to file Form 4684. My pay gov You will also have to file one or more of the following forms. My pay gov Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. My pay gov   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. My pay gov Workbook for casualties and thefts. My pay gov    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. My pay gov It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. My pay gov Business or investment-related losses. My pay gov   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. My pay gov Useful Items - You may want to see: Publication 544 Sales and Other Dispositions  of Assets 547 Casualties, Disasters, and   Thefts 584 Casualty, Disaster, and Theft   Loss Workbook (Personal-Use  Property) Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. My pay gov A sudden event is one that is swift, not gradual or progressive. My pay gov An unexpected event is one that is ordinarily unanticipated and unintended. My pay gov 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. My pay gov Deductible losses. My pay gov   Deductible casualty losses can result from a number of different causes, including the following. My pay gov Car accidents (but see Nondeductible losses , next, for exceptions). My pay gov Earthquakes. My pay gov Fires (but see Nondeductible losses , next, for exceptions). My pay gov Floods. My pay gov 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. My pay gov Mine cave-ins. My pay gov Shipwrecks. My pay gov Sonic booms. My pay gov Storms, including hurricanes and tornadoes. My pay gov Terrorist attacks. My pay gov Vandalism. My pay gov Volcanic eruptions. My pay gov Nondeductible losses. My pay gov   A casualty loss is not deductible if the damage or destruction is caused by the following. My pay gov Accidentally breaking articles such as glassware or china under normal conditions. My pay gov A family pet (explained below). My pay gov A fire if you willfully set it or pay someone else to set it. My pay gov A car accident if your willful negligence or willful act caused it. My pay gov The same is true if the willful act or willful negligence of someone acting for you caused the accident. My pay gov Progressive deterioration (explained later). My pay gov Family pet. My pay gov   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. My pay gov Example. My pay gov Your antique oriental rug was damaged by your new puppy before it was housebroken. My pay gov Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. My pay gov Progressive deterioration. My pay gov    Loss of property due to progressive deterioration is not deductible as a casualty loss. My pay gov This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. My pay gov The following are examples of damage due to progressive deterioration. My pay gov The steady weakening of a building due to normal wind and weather conditions. My pay gov The deterioration and damage to a water heater that bursts. My pay gov However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. My pay gov Most losses of property caused by droughts. My pay gov To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. My pay gov Termite or moth damage. My pay gov The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. My pay gov However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. My pay gov Damage from corrosive drywall. My pay gov   Under a special procedure, you may be able to claim a casualty loss deduction for amounts you paid to repair damage to your home and household appliances that resulted from corrosive drywall. My pay gov For details, see Publication 547. My pay gov Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. My pay gov The taking of property must be illegal under the laws of the state where it occurred and it must have been done with criminal intent. My pay gov You do not need to show a conviction for theft. My pay gov Theft includes the taking of money or property by the following means. My pay gov Blackmail. My pay gov Burglary. My pay gov Embezzlement. My pay gov Extortion. My pay gov Kidnapping for ransom. My pay gov Larceny. My pay gov Robbery. My pay gov The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. My pay gov Decline in market value of stock. My pay gov   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. My pay gov 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. My pay gov You report a capital loss on Schedule D (Form 1040). My pay gov For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. My pay gov Mislaid or lost property. My pay gov   The simple disappearance of money or property is not a theft. My pay gov 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. My pay gov Sudden, unexpected, and unusual events are defined earlier. My pay gov Example. My pay gov A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. My pay gov The diamond falls from the ring and is never found. My pay gov The loss of the diamond is a casualty. My pay gov Losses from Ponzi-type investment schemes. My pay gov   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. My pay gov R. My pay gov B. My pay gov 735 (available at www. My pay gov irs. My pay gov gov/irb/2009-14_IRB/ar07. My pay gov html). My pay gov Revenue Procedure 2009-20, 2009-14 I. My pay gov R. My pay gov B. My pay gov 749 (available at www. My pay gov irs. My pay gov gov/irb/2009-14_IRB/ar11. My pay gov html). My pay gov Revenue Procedure 2011-58, 2011-50 I. My pay gov R. My pay gov B. My pay gov 849 (available at www. My pay gov irs. My pay gov gov/irb/2011-50_IRB/ar11. My pay gov html). My pay gov 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. My pay gov Skip lines 19 to 27. My pay gov Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. My pay gov You do not need to complete Appendix A. My pay gov For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. My pay gov   If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. My pay gov Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. My pay gov If you incurred this type of loss, you can choose one of the following ways to deduct the loss. My pay gov As a casualty loss. My pay gov As an ordinary loss. My pay gov As a nonbusiness bad debt. My pay gov Casualty loss or ordinary loss. My pay gov   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. My pay gov The choice is generally 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. My pay gov 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. My pay gov 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. My pay gov Once you make this choice, you cannot change it without permission from the Internal Revenue Service. My pay gov   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. My pay gov The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. My pay gov Your loss is subject to the 2%-of-adjusted-gross-income limit. My pay gov You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. My pay gov Nonbusiness bad debt. My pay gov   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. My pay gov How to report. My pay gov   The kind of deduction you choose for your loss on deposits determines how you report your loss. My pay gov If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). My pay gov Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. My pay gov Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). My pay gov More information. My pay gov   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684 or Deposit in Insolvent or Bankrupt Financial Institution in Publication 550. My pay gov Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. My pay gov You also must be able to support the amount you take as a deduction. My pay gov Casualty loss proof. My pay gov   For a casualty loss, your records should show all the following. My pay gov The type of casualty (car accident, fire, storm, etc. My pay gov ) and when it occurred. My pay gov That the loss was a direct result of the casualty. My pay gov 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. My pay gov Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. My pay gov Theft loss proof. My pay gov   For a theft loss, your records should show all the following. My pay gov When you discovered that your property was missing. My pay gov That your property was stolen. My pay gov That you were the owner of the property. My pay gov Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. My pay gov It is important that you have records that will prove your deduction. My pay gov If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. My pay gov Figuring a Loss Figure the amount of your loss using the following steps. My pay gov Determine your adjusted basis in the property before the casualty or theft. My pay gov Determine the decrease in fair market value of the property as a result of the casualty or theft. My pay gov From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. My pay gov 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. My pay gov Gain from reimbursement. My pay gov   If your reimbursement is more than your adjusted basis in the property, you have a gain. My pay gov This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. My pay gov If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. My pay gov See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. My pay gov Leased property. My pay gov   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. My pay gov 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. My pay gov 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. My pay gov FMV of stolen property. My pay gov   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. My pay gov Example. My pay gov Several years ago, you purchased silver dollars at face value for $150. My pay gov This is your adjusted basis in the property. My pay gov Your silver dollars were stolen this year. My pay gov The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. My pay gov Your theft loss is $150. My pay gov Recovered stolen property. My pay gov   Recovered stolen property is your property that was stolen and later returned to you. My pay gov 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. My pay gov Use this amount to refigure your total loss for the year in which the loss was deducted. My pay gov   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. My pay gov But report the difference only up to the amount of the loss that reduced your tax. My pay gov For more information on the amount to report, see Recoveries in chapter 12. My pay gov 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. My pay gov However, other measures can also be used to establish certain decreases. My pay gov Appraisal. My pay gov   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. My pay gov The appraiser must recognize the effects of any general market decline that may occur along with the casualty. My pay gov This information is needed to limit any deduction to the actual loss resulting from damage to the property. My pay gov   Several factors are important in evaluating the accuracy of an appraisal, including the following. My pay gov The appraiser's familiarity with your property before and after the casualty or theft. My pay gov The appraiser's knowledge of sales of comparable property in the area. My pay gov The appraiser's knowledge of conditions in the area of the casualty. My pay gov The appraiser's method of appraisal. My pay gov    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. My pay gov For more information on disasters, see Disaster Area Losses, in Pub. My pay gov 547. My pay gov Cost of cleaning up or making repairs. My pay gov   The cost of repairing damaged property is not part of a casualty loss. My pay gov Neither is the cost of cleaning up after a casualty. My pay gov 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. My pay gov The repairs are actually made. My pay gov The repairs are necessary to bring the property back to its condition before the casualty. My pay gov The amount spent for repairs is not excessive. My pay gov The repairs take care of the damage only. My pay gov The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. My pay gov Landscaping. My pay gov   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. My pay gov You may be able to measure your loss by what you spend on the following. My pay gov Removing destroyed or damaged trees and shrubs minus any salvage you receive. My pay gov Pruning and other measures taken to preserve damaged trees and shrubs. My pay gov Replanting necessary to restore the property to its approximate value before the casualty. My pay gov Car value. My pay gov    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. My pay gov You can use the book's retail values and modify them by such factors as mileage and the condition of your car to figure its value. My pay gov 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. My pay gov If your car is not listed in the books, determine its value from other sources. My pay gov A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. My pay gov 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. My pay gov Cost of protection. My pay gov   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. My pay gov The amount you spend on insurance or to board up your house against a storm is not part of your loss. My pay gov   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. My pay gov An example would be the cost of a dike to prevent flooding. My pay gov Exception. My pay gov   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. My pay gov See Disaster Area Losses in Publication 547. My pay gov Incidental expenses. My pay gov   Any incidental expenses you have 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. My pay gov Replacement cost. My pay gov   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. My pay gov Sentimental value. My pay gov   Do not consider sentimental value when determining your loss. My pay gov 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. My pay gov Decline in market value of property in or near casualty area. My pay gov   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. My pay gov You have a loss only for actual casualty damage to your property. My pay gov However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. My pay gov Costs of photographs and appraisals. My pay gov    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. My pay gov Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. My pay gov    Appraisals are used to figure the decrease in FMV because of a casualty or theft. My pay gov See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. My pay gov   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. My pay gov You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). My pay gov For information about miscellaneous deductions, see chapter 28. My pay gov Adjusted Basis Adjusted basis is your basis in the property (usually cost) increased or decreased by various events, such as improvements and casualty losses. My pay gov For more information, see chapter 13. My pay gov Insurance and Other Reimbursements If you receive an insurance payment or other type of reimbursement, you must subtract the reimbursement when you figure your loss. My pay gov You do not have a casualty or theft loss to the extent you are reimbursed. My pay gov If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. My pay gov You must reduce your loss even if you do not receive payment until a later tax year. My pay gov See Reimbursement Received After Deducting Loss , later. My pay gov Failure to file a claim for reimbursement. My pay gov   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. My pay gov Otherwise, you cannot deduct this loss as a casualty or theft loss. My pay gov However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). My pay gov Example. My pay gov You have a car insurance policy with a $1,000 deductible. My pay gov Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the deduction limits discussed later). My pay gov This is true even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. My pay gov Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. My pay gov Other types of reimbursements are discussed next. My pay gov Also see the Instructions for Form 4684. My pay gov Employer's emergency disaster fund. My pay gov   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. My pay gov Take into consideration only the amount you used to replace your destroyed or damaged property. My pay gov Example. My pay gov Your home was extensively damaged by a tornado. My pay gov Your loss after reimbursement from your insurance company was $10,000. My pay gov Your employer set up a disaster relief fund for its employees. My pay gov Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. My pay gov You received $4,000 from the fund and spent the entire amount on repairs to your home. My pay gov In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. My pay gov Your casualty loss before applying the deduction limits discussed later is $6,000. My pay gov Cash gifts. My pay gov   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. My pay gov This applies even if you use the money to pay for repairs to property damaged in the disaster. My pay gov Example. My pay gov Your home was damaged by a hurricane. My pay gov Relatives and neighbors made cash gifts to you that were excludable from your income. My pay gov You used part of the cash gifts to pay for repairs to your home. My pay gov There were no limits or restrictions on how you could use the cash gifts. My pay gov Because it was an excludable gift, the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. My pay gov Insurance payments for living expenses. My pay gov   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. My pay gov You lose the use of your main home because of a casualty. My pay gov Government authorities do not allow you access to your main home because of a casualty or threat of one. My pay gov Inclusion in income. My pay gov   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. My pay gov Report this amount on Form 1040, line 21. My pay gov However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. My pay gov See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. My pay gov   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. My pay gov Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. My pay gov Generally, these expenses include the amounts you pay for the following. My pay gov Rent for suitable housing. My pay gov Transportation. My pay gov Food. My pay gov Utilities. My pay gov Miscellaneous services. My pay gov 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. My pay gov Example. My pay gov As a result of a fire, you vacated your apartment for a month and moved to a motel. My pay gov You normally pay $525 a month for rent. My pay gov None was charged for the month the apartment was vacated. My pay gov Your motel rent for this month was $1,200. My pay gov You normally pay $200 a month for food. My pay gov Your food expenses for the month you lived in the motel were $400. My pay gov You received $1,100 from your insurance company to cover your living expenses. My pay gov You determine the payment you must include in income as follows. My pay gov 1) Insurance payment for living expenses $1,100 2) Actual expenses during the month you are unable to use your home because of fire 1,600   3) Normal living expenses 725   4) Temporary increase in living  expenses: Subtract line 3 from line 2 875 5) Amount of payment includible  in income: Subtract line 4  from line 1 $ 225 Tax year of inclusion. My pay gov   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. My pay gov Example. My pay gov Your main home was destroyed by a tornado in August 2011. My pay gov You regained use of your home in November 2012. My pay gov The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. My pay gov You include this amount in income on your 2012 Form 1040. My pay gov 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. My pay gov Disaster relief. My pay gov   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. My pay gov Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster are not taxable income to you. My pay gov For more information, see Disaster Area Losses in Publication 547. My pay gov Disaster unemployment assistance payments are unemployment benefits that are taxable. My pay gov Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. My pay gov Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not includible in your income. My pay gov See Disaster Area Losses in Publication 547. My pay gov Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you receive your actual reimbursement. My pay gov This section explains the adjustment you may have to make. My pay gov Actual reimbursement less than expected. My pay gov   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. My pay gov Example. My pay gov Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. My pay gov The accident was due to the negligence of the other driver. My pay gov At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. My pay gov You did not have a deductible loss in 2012. My pay gov In January 2013, the court awarded you a judgment of $2,000. My pay gov However, in July it became apparent that you will be unable to collect any amount from the other driver. My pay gov You can deduct the loss in 2013 subject to the limits discussed later. My pay gov Actual reimbursement more than expected. My pay gov   If you later receive more reimbursement than you expected after you claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. My pay gov 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. My pay gov You do not refigure your tax for the year you claimed the deduction. My pay gov For more information, see Recoveries in chapter 12. My pay gov 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. My pay gov 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. My pay gov Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. My pay gov See Figuring a Gain in Publication 547 for more information on how to treat a gain from the reimbursement of a casualty or theft. My pay gov Actual reimbursement same as expected. My pay gov   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. My pay gov Example. My pay gov In December 2013, you had a collision while driving your personal car. My pay gov Repairs to the car cost $950. My pay gov You had $100 deductible collision insurance. My pay gov Your insurance company agreed to reimburse you for the rest of the damage. My pay gov Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. My pay gov Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. My pay gov When you receive the $850 from the insurance company in 2014, do not report it as income. My pay gov Single Casualty on Multiple Properties Personal property. My pay gov   Personal property is any property that is not real property. My pay gov 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. My pay gov Then combine these separate losses to figure the total loss from that casualty or theft. My pay gov Example. My pay gov A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. My pay gov You did not have fire insurance to cover your loss. My pay gov (This was the only casualty or theft you had during the year. My pay gov ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. My pay gov The rug cost $3,000 and had an FMV of $2,500 just before the fire. My pay gov You bought the table at an auction for $100 before discovering it was an antique. My pay gov It had been appraised at $900 before the fire. My pay gov You figure your loss on each of these items as follows:     Chair Rug Table 1) Basis (cost) $750 $3,000 $100 2) FMV before fire $500 $2,500 $900 3) FMV after fire –0– –0– –0– 4) Decrease in FMV $500 $2,500 $900 5) Loss (smaller of (1) or  (4)) $500 $2,500 $100           6) Total loss     $3,100 Real property. My pay gov   In figuring a casualty loss on personal-use real property, treat the entire property (including any improvements, such as buildings, trees, and shrubs) as one item. My pay gov Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. My pay gov Example. My pay gov You bought your home a few years ago. My pay gov You paid $160,000 ($20,000 for the land and $140,000 for the house). My pay gov You also spent $2,000 for landscaping. My pay gov This year a fire destroyed your home. My pay gov The fire also damaged the shrubbery and trees in your yard. My pay gov The fire was your only casualty or theft loss this year. My pay gov Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. My pay gov (The loss to your household furnishings is not shown in this example. My pay gov It would be figured separately on each item, as explained earlier under Personal property . My pay gov ) Shortly after the fire, the insurance company paid you $155,000 for the loss. My pay gov You figure your casualty loss as follows: 1) Adjusted basis of the entire property (land, building, and landscaping) $162,000 2) FMV of entire property before fire $200,000 3) FMV of entire property after fire 30,000 4) Decrease in FMV of entire  property $170,000 5) Loss (smaller of (1) or (4)) $162,000 6) Subtract insurance 155,000 7) Amount of loss after reimbursement $7,000 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. My pay gov If the loss was to property for your personal use or your family's use, there are two limits on the amount you can deduct for your casualty or theft loss. My pay gov You must reduce each casualty or theft loss by $100 ($100 rule). My pay gov You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). My pay gov You make these reductions on Form 4684. My pay gov These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. My pay gov For more detailed explanations and examples, see Publication 547. My pay gov Table 25-1. My pay gov How To Apply the Deduction Limits for Personal-Use Property   $100 Rule 10% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. My pay gov Apply this rule after you have figured the amount of your loss. My pay gov You must reduce your total casualty or theft loss by 10% of your adjusted gross income. My pay gov Apply this rule after you reduce each loss by $100 (the $100 rule). My pay gov Single Event Apply this rule only once, even if many pieces of property are affected. My pay gov Apply this rule only once, even if many pieces of property are affected. My pay gov More Than One Event Apply to the loss from each event. My pay gov Apply to the total of all your losses from all events. My pay gov More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. My pay gov Apply separately to each person. My pay gov Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. My pay gov Apply as if you were one person. My pay gov Filing Separately Apply separately to each spouse. My pay gov Apply separately to each spouse. My pay gov More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. My pay gov Apply separately to each owner of jointly owned property. My pay gov Property used partly for business and partly for personal purposes. My pay gov   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 part and for the business or income-producing part. My pay gov You must figure each loss separately because the $100 rule and the 10% rule apply only to the loss on the personal-use part of the property. My pay gov $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. My pay gov This reduction applies to each total casualty or theft loss. My pay gov It does not matter how many pieces of property are involved in an event. My pay gov Only a single $100 reduction applies. My pay gov Example. My pay gov A hailstorm damages your home and your car. My pay gov Determine the amount of loss, as discussed earlier, for each of these items. My pay gov Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. My pay gov Single event. My pay gov   Generally, events closely related in origin cause a single casualty. My pay gov 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. My pay gov 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. My pay gov Apply this rule after you reduce each loss by $100. My pay gov For more information, see the Form 4684 instructions. My pay gov If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. My pay gov Example 1. My pay gov In June, you discovered that your house had been burglarized. My pay gov Your loss after insurance reimbursement was $2,000. My pay gov Your adjusted gross income for the year you discovered the theft is $29,500. My pay gov You first apply the $100 rule and then the 10% rule. My pay gov Figure your theft loss deduction as follows. My pay gov 1) Loss after insurance $2,000 2) Subtract $100 100 3) Loss after $100 rule $1,900 4) Subtract 10% × $29,500 AGI 2,950 5) Theft loss deduction –0– You do not have a theft loss deduction because your loss after you apply the $100 rule ($1,900) is less than 10% of your adjusted gross income ($2,950). My pay gov Example 2. My pay gov In March, you had a car accident that totally destroyed your car. My pay gov You did not have collision insurance on your car, so you did not receive any insurance reimbursement. My pay gov Your loss on the car was $1,800. My pay gov In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. My pay gov Your loss on the basement items after reimbursement was $2,100. My pay gov Your adjusted gross income for the year that the accident and fire occurred is $25,000. My pay gov You figure your casualty loss deduction as follows. My pay gov       Base-     Car ment 1) Loss $1,800 $2,100 2) Subtract $100 per incident 100 100 3) Loss after $100 rule $1,700 $2,000 4) Total loss $3,700 5) Subtract 10% × $25,000 AGI 2,500 6) Casualty loss deduction $1,200 Gains and losses. My pay gov   If you had both gains and losses from casualties or thefts to personal-use property, you must compare your total gains to your total losses. My pay gov 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. My pay gov Casualty or theft gains do not include gains you choose to postpone. My pay gov See Publication 547 for information on the postponement of gain. My pay gov Losses more than gains. My pay gov   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. My pay gov The rest, if any, is your deductible loss from personal-use property. My pay gov Gains more than losses. My pay gov   If your recognized gains are more than your losses, subtract your losses from your gains. My pay gov The difference is treated as capital gain and must be reported on Schedule D (Form 1040). My pay gov The 10% rule does not apply to your gains. My pay gov When To Report Gains and Losses Gains. My pay gov   If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. My pay gov You must include this gain in your income in the year you receive the reimbursement, unless you choose to postpone reporting the gain as explained in Publication 547. My pay gov If you have a loss, see Table 25-2 . My pay gov Table 25-2. My pay gov When To Deduct a Loss IF you have a loss. My pay gov . My pay gov . My pay gov THEN deduct it in the year. My pay gov . My pay gov . My pay gov from a casualty, the loss occurred. My pay gov in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. My pay gov from a theft, the theft was discovered. My pay gov on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. My pay gov • bad debt, deposits are totally worthless. My pay gov Losses. My pay gov   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. My pay gov This is true even if you do not repair or replace the damaged property until a later year. My pay gov   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. My pay gov   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. My pay gov Loss on deposits. My pay gov   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. My pay gov Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. My pay gov However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct the loss on your tax return or amended return for either of the following years. My pay gov The year the disaster occurred. My pay gov The year immediately preceding the year the disaster occurred. My pay gov Gains. My pay gov    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. My pay gov For those special rules, see Publication 547. My pay gov Postponed tax deadlines. My pay gov   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. My pay gov The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. My pay gov   If any tax deadline is postponed, the IRS will publicize the postponement in your area by publishing a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). My pay gov Go to www. My pay gov irs. My pay gov gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. My pay gov Who is eligible. My pay gov   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. My pay gov Any individual whose main home is located in a covered disaster area (defined next). My pay gov Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. My pay gov Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. My pay gov 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. My pay gov The main home or principal place of business does not have to be located in the covered disaster area. My pay gov 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. My pay gov The spouse on a joint return with a taxpayer who is eligible for postponements. My pay gov Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a postponed tax deadline are located in the covered disaster area. My pay gov Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. My pay gov Any other person determined by the IRS to be affected by a federally declared disaster. My pay gov Covered disaster area. My pay gov   This is an area of a federally declared disaster in which the IRS has decided to postpone tax deadlines for up to 1 year. My pay gov Abatement of interest and penalties. My pay gov   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. My pay gov More information. My pay gov   For more information, see Disaster Area Losses in Publication 547. My pay gov How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. My pay gov If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. My pay gov Combine the gains and losses on one Form 4684. My pay gov Follow the form instructions as to which lines to fill out. My pay gov In addition, you must use the appropriate schedule to report a gain or loss. My pay gov The schedule you use depends on whether you have a gain or loss. My pay gov If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. My pay gov   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. My pay gov Amounts you spend to restore your property after a casualty increase your adjusted basis. My pay gov See Adjusted Basis in chapter 13 for more information. My pay gov Net operating loss (NOL). My pay gov    If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have an NOL. My pay gov You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you have already paid. My pay gov Or, you can use it to lower your tax in a later year. My pay gov You do not have to be in business to have an NOL from a casualty or theft loss. My pay gov For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. My pay gov Prev  Up  Next   Home   More Online Publications
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Brandon, MS

Website: Better Business Bureau

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Address: Better Business Bureau
505 Avalon Way, Suite B
Brandon, MS 39047

Phone Number: 601-398-1700

Toll-free: 1-800-987-8280

The My Pay Gov

My pay gov It's easy, accurate and fast. So why would you file your taxes any other way? My pay gov Old fashioned paper tax forms have been around for decades, but it might be time for them to go the way of the dodo. Who wants to wait for weeks to get their check in the mail when you can just efile your tax return electronically with the IRS and start enjoying your refund in as little as 7 days. My pay gov If you consider the money the IRS holds on to while you wait for your refund as an interest free loan, then you’ll realize that you are losing money. No one other than the IRS can get an interest free loan and that doesn’t seem fair, does it? Enter the internet age. Commercial companies have been moving online for years now - when was the last time you've mailed a check or received a paper statement from your bank? Now, even the government sites are starting to get with the program and are offering quick and easy efile to everyone. Here are a few reasons why I switched to efile; maybe it’s time you do to!