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State Franchise Tax Forms

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State Franchise Tax Forms

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

State franchise tax forms Publication 15-T - Additional Material Table of Contents This image is too large to be displayed in the current screen. State franchise tax forms Please click the link to view the image. State franchise tax forms Form W-4 (2009) This image is too large to be displayed in the current screen. State franchise tax forms Please click the link to view the image. State franchise tax forms Deductions and Adjustments Worksheet Notice to Employees Please click here for the text description of the image. State franchise tax forms Multi-Media/Back Page Prev  Up  Next   Home   More Online Publications