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

Printable 1040ez Form 2011

Can I File My 2011 Taxes OnlineFreetaxusa ComWhere Do I File My State Taxes For FreeAmending 2012 Federal Tax ReturnTax Planning Us 1040aHow Can I File My 2012 TaxesIrs.gov/1040xIrs 1040x 2010Army H&r Block1040ezHow To Amend Federal Tax ReturnFederal Ez FormIrs E File 1040 Ez1040x Instructions For DummiesState Income Tax Filing FreeUnemployed TaxesFile Tax Return For 20111040 Tax Forms For 2012Free Tax Filing For 2011Can You Still E File 2010 Tax Returns1040 Ez Form 20121040 Tax Forms For 20112011 1040ezAmend 1040xTax Forms Download Ez 10401040nr FilingCan I File 2011 Tax Return OnlineWww Irs Gov Form1040ezWhere Do I Get A 1040x Form2011 1040ezMyfreetaxsIrs 2012 Tax Return Forms1040ez Tax Form 2012How To Amend A Tax Return With TurbotaxH & R Block Advantage Free FileLa State Tax Forms 2012Ez TaxDireccion Irs Para Enviar Form 1040x2012 1040ezFree State Tax Preparation

Printable 1040ez Form 2011

Printable 1040ez form 2011 Tax Changes for Businesses Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Electronic Form 1099 Tax Incentives for New York Liberty Zone Other 2001 Changes 2002 ChangesNonaccrual-Experience Method Issuance of Qualified Zone Academy Bonds Depletion Work Opportunity Credit Expanded in New York Liberty Zone Credit For Pension Plan Startup Costs Welfare-to-Work Credit Extended Work Opportunity Credit Extended Electric and Clean-Fuel Vehicles Renewable Electricity Production Credit Later ChangesSpecial Depreciation Allowance Extension of Placed in Service Date Special Liberty Zone Depreciation Allowance for New and Used Property Depreciation of Property Used on Indian Reservations Indian Employment Credit Extended 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). Printable 1040ez form 2011 However, you can still choose to use the previous carryback period. Printable 1040ez form 2011 You also can choose not to carry back an NOL and only carry it forward. Printable 1040ez form 2011 Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. Printable 1040ez form 2011 Corporations can file Form 1139, Corporation Application for Tentative Refund. Printable 1040ez form 2011 The instructions for these forms will be revised to reflect the new law. Printable 1040ez form 2011 Electronic Form 1099 For tax years ending after March 9, 2002, most Forms 1099 can be furnished electronically if the recipient consents, according to IRS regulations, to receive it that way. Printable 1040ez form 2011 Tax Incentives for New York Liberty Zone New tax benefits are provided for the parts of New York City damaged in the terrorist attacks on September 11, 2001. Printable 1040ez form 2011 These benefits apply to the newly created New York Liberty Zone, which is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway), in the Borough of Manhattan. Printable 1040ez form 2011 Tax benefits for the New York Liberty Zone include the following. Printable 1040ez form 2011 A special depreciation allowance equal to 30% of the adjusted basis of qualified Liberty Zone property. Printable 1040ez form 2011 It is allowed for the year the property is placed in service. Printable 1040ez form 2011 No alternative minimum tax depreciation adjustment for qualified Liberty Zone property. Printable 1040ez form 2011 Classification of Liberty Zone leasehold improvement property as 5-year property. Printable 1040ez form 2011 Authorization of the issuance of tax-exempt New York Liberty bonds to finance the acquisition, construction, reconstruction, and renovation of nonresidential real property, residential rental property, and public utility property in the Liberty Zone. Printable 1040ez form 2011 An increased section 179 deduction for certain Liberty Zone property. Printable 1040ez form 2011 Extension of the replacement period from 2 years to 5 years for certain property involuntarily converted as a result of the terrorist attacks on September 11, 2001, but only if substantially all of the use of the replacement property is in New York City. Printable 1040ez form 2011 For more information about involuntary conversions, see Postponement of Gain in Publication 547, Casualties, Disasters, and Thefts. Printable 1040ez form 2011 In addition, for 2002 and 2003, the work opportunity credit is expanded by creating a new targeted group, consisting generally of employees who work in the Liberty Zone or, in certain cases, in New York City outside the Liberty Zone. Printable 1040ez form 2011 For more information, see Work Opportunity Credit Expanded in New York Liberty Zone under 2002 Changes, later. Printable 1040ez form 2011 For more information about the 30% special depreciation allowance, Liberty Zone leasehold improvement property, or increased section 179 deduction, see New York Liberty Zone Benefits, in chapter 5. Printable 1040ez form 2011 In addition, the tax benefits for the Liberty Zone will be covered in a new edition of Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities, available later in 2002. Printable 1040ez form 2011 Other 2001 Changes Other changes are discussed in the following chapters. Printable 1040ez form 2011 Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Nonaccrual-Experience Method Under current law, if you perform services and use an accrual method of accounting, you do not accrue income which, based on experience, you expect to be uncollectible. Printable 1040ez form 2011 Beginning in 2002, this rule only applies if you perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting, or your average annual gross receipts for the 3 prior tax years does not exceed $5,000,000. Printable 1040ez form 2011 As under current law, the nonaccrual-experience method will not apply to amounts on which you charge interest or a late payment penalty. Printable 1040ez form 2011 For more information, see Nonaccrual-Experience Method in chapter 11 of Publication 535, Business Expenses. Printable 1040ez form 2011 Issuance of Qualified Zone Academy Bonds State and local governments issue qualified zone academy bonds to raise funds for the use of qualified zone academies. Printable 1040ez form 2011 The amount of bonds that may be issued was limited to $400 million each year for 1998, 1999, 2000, and 2001. Printable 1040ez form 2011 This provision has been extended to provide for an additional $400 million of bonds to be issued each year for 2002 and 2003. Printable 1040ez form 2011 For more information about qualified zone academy bonds, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Printable 1040ez form 2011 Depletion The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas that was scheduled to expire for tax years beginning after 2001 has been extended to tax years beginning before 2004. Printable 1040ez form 2011 For more information on marginal production, see section 613A(c) of the Internal Revenue Code. Printable 1040ez form 2011 Work Opportunity Credit Expanded in New York Liberty Zone The work opportunity credit is expanded to include a new targeted group consisting generally of employees who perform substantially all their services: In the New York Liberty Zone (defined earlier under Tax Incentives for New York Liberty Zone, under 2001 Changes), or Elsewhere in New York City for a business that relocated from the Liberty Zone due to the destruction or damage of its place of business by the September 11, 2001, terrorist attack. Printable 1040ez form 2011 The credit is available to employers for wages paid to new employees and existing employees for work performed during 2002 or 2003. Printable 1040ez form 2011 Certain limits apply. Printable 1040ez form 2011 For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Printable 1040ez form 2011 Credit For Pension Plan Startup Costs The credit for pension plan startup costs is now allowed for plans that become effective after December 31, 2001. Printable 1040ez form 2011 Previously, the credit was only allowed for plans established after December 31, 2001. Printable 1040ez form 2011 For more information on the credit, see Important Changes for 2002 in Publication 560, Retirement Plans for Small Business. Printable 1040ez form 2011 Welfare-to-Work Credit Extended The welfare-to-work credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Printable 1040ez form 2011 For more information on the welfare-to-work credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Printable 1040ez form 2011 Work Opportunity Credit Extended The work opportunity credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Printable 1040ez form 2011 For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Printable 1040ez form 2011 Electric and Clean-Fuel Vehicles The maximum clean-fuel vehicle deduction and qualified electric vehicle credit were scheduled to be 25% lower for 2002 and both were scheduled to be phased out completely by 2005. Printable 1040ez form 2011 The full deduction and credit are now allowed for qualified property placed in service in 2002 and 2003. Printable 1040ez form 2011 The phaseout of the deduction and the credit will begin in 2004, and no deduction or credit will be allowed for property placed in service after 2006. Printable 1040ez form 2011 For more information about electric and clean-fuel vehicles, see chapter 12 in Publication 535, Business Expenses. Printable 1040ez form 2011 Renewable Electricity Production Credit The renewable electricity production credit is extended to include electricity produced by facilities placed in service after 2001 and before 2004. Printable 1040ez form 2011 Later Changes Special Depreciation Allowance You can claim the special depreciation allowance (an additional 30% depreciation deduction) for new property that you acquire before September 11, 2004, and place in service for your business generally before January 1, 2005, if you meet the other requirements for qualified property covered in chapter 5. Printable 1040ez form 2011 Accordingly, you will generally no longer be able to claim the special depreciation allowance for the qualified property if you acquire it after September 10, 2004, or place it in service for your business after December 31, 2004. Printable 1040ez form 2011 However, you will be able to claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for most qualified property if you place it in service in the Liberty Zone after December 31, 2004, and generally before January 1, 2007, provided you meet the other requirements for qualified Liberty Zone property covered in chapter 5. Printable 1040ez form 2011 Extension of Placed in Service Date To qualify for the special depreciation allowance, your property must meet certain tests, including the placed in service date test, as well as the other requirements covered in chapter 5 of this publication. Printable 1040ez form 2011 To meet the placed in service date test, your property must generally be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. Printable 1040ez form 2011 However, certain property placed in service before January 1, 2006, may meet this test. Printable 1040ez form 2011 Transportation property and property with a recovery period of 10 years or longer meet the test if one of the following applies. Printable 1040ez form 2011 The property has an estimated production period of more than 2 years. Printable 1040ez form 2011 The property has an estimated production period of more than 1 year and it costs more than $1 million. Printable 1040ez form 2011 Transportation property is any tangible personal property used in the trade or business of transporting persons or property. Printable 1040ez form 2011 For property that qualifies for the special depreciation allowance solely because of the one-year extension of the placed in service date, only the part of the basis attributable to manufacture, construction, or production before September 11, 2004, is eligible for the special depreciation allowance. Printable 1040ez form 2011 Special Liberty Zone Depreciation Allowance for New and Used Property You can claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for used property that you acquire after September 10, 2001, if the property meets the requirements listed under Qualified Liberty Zone Property in chapter 5 of this publication. Printable 1040ez form 2011 You will be able to claim the allowance for both new and used property that you acquire after September 10, 2004, provided the property meets the other requirements for qualified Liberty Zone property. Printable 1040ez form 2011 Depreciation of Property Used on Indian Reservations The special depreciation rules that apply to qualified property used on an Indian reservation were scheduled to expire for property placed in service after 2003. Printable 1040ez form 2011 These special rules have been extended to include property placed in service in 2004. Printable 1040ez form 2011 For more information about these rules, see Publication 946, How To Depreciate Property. Printable 1040ez form 2011 Indian Employment Credit Extended The Indian employment credit that was scheduled to expire for tax years beginning after 2003 has been extended to include a tax year beginning in 2004. Printable 1040ez form 2011 For more information about this credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Printable 1040ez form 2011 Prev  Up  Next   Home   More Online Publications
Español

Institute of Peace

The Institute of Peace promotes research, policy analysis, education, and training on international peace and conflict resolution in an effort to prevent and resolve violent conflicts, and to promote post-conflict stability.

Contact the Agency or Department

Website: Institute of Peace

Address: 2301 Constitution Ave NW
Washington, DC 20037

Phone Number: (202) 457-1700

The Printable 1040ez Form 2011

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