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taxmap/pubs/p547-000.htm#en_us_publink1000225183
Publication 547

Casualties,  
Disasters,  
and Thefts

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What's New(p1)

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taxmap/pubs/p547-000.htm#en_us_publink100068529
Disaster relief.(p1)
Personal casualty losses resulting from federally declared disasters that occurred in 2016, as well as Hurricane and Tropical Storm Harvey, Hurricanes Irma and Maria, and the California wildfires, may be claimed as a qualified disaster loss on your Form 4684. See Disaster Area Losses, later, for more information on the special relief provided as part of the Disaster Tax Relief and Airport and Airway Extension Act of 2017, the Tax Reform Act of 2017, and the Bipartisan Budget Act of 2018. Also see Pub. 976, Disaster Relief, and IRS.gov/DisasterTaxRelief for more information about these and other disaster tax relief provisions.
taxmap/pubs/p547-000.htm#en_us_publink100077886
Determining and reporting casualty losses using safe harbor methods. (p1)
You may be able to use certain safe harbor methods to determine the amount of your personal casualty and theft losses. For more information, see Safe Harbor Methods for Determining Casualty and Theft Losses, later.
taxmap/pubs/p547-000.htm#en_us_publink100077887
Damage caused by certain deteriorating concrete foundations may be treated as casualty loss.(p1)
Effective for federal income tax returns (including amended returns) filed after November 21, 2017, damage to personal residences resulting from deteriorating concrete foundations caused by the presence of mineral pyrrhotite may be treated as a casualty loss. For more information, see Special Provision for Damage From Deteriorating Concrete Foundation, later.
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2018 disaster losses.(p1)
A new Section D has been added to Form 4684 to make an election (or revoke a prior election) to deduct a loss sustained in a disaster and attributable to a federally declared disaster in the tax year immediately preceding the disaster year, defined later. For disaster years beginning in 2018, the election may be made by completing Section D and attaching it to your return or amended return that claims the disaster loss deduction. For more information about Section D, see the Instructions for Form 4684.
EIC
For tax years beginning after December 31, 2017, and ending before January 1, 2026, personal casualty losses will be allowed as a deduction only to the extent they are attributable to a federally declared disaster as defined under Disaster Area Losses, later.

Reminders(p2)

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taxmap/pubs/p547-000.htm#en_us_publink100068533
Disaster losses.(p2)
Effective October 13, 2016, the due date for making an election to deduct a loss attributable to a federally declared disaster in the tax year immediately before the tax year in which the disaster loss was sustained has been extended by six months. The period for revoking the election has also been extended to 90 days after the due date for making the election. See When to deduct the loss under Disaster Area Losses, later, for more information.
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Future developments.(p2)
For the latest information about developments related to Pub. 547, such as legislation enacted after it was published, go to IRS.gov/Pub547.
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Photographs of missing children.(p2)
The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p547-000.htm#en_us_publink1000177207Introduction

This publication explains the tax treatment of casualties, thefts, and losses on deposits. A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident, or similar event. A theft occurs when someone steals your property. A loss on deposits occurs when your financial institution becomes insolvent or bankrupt.
This publication discusses the following topics.
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Forms to file.(p2)

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Generally, when you have a casualty or theft, you have to file Form 4684. You may also have to file one or more of the following forms. For details on which form to use, see How To Report Gains and Losses, later.
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Condemnations.(p2)

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For information on condemnations of property, see Involuntary Conversions in chapter 1 of Pub. 544, Sales and Other Dispositions of Assets.
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Workbooks for casualties and thefts.(p2)

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Pub. 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property), is available to help you make a list of your stolen or damaged personal-use property and figure your loss. It includes schedules to help you figure the loss on your home and its contents, and your motor vehicles.
Pub. 584-B, Business Casualty, Disaster, and Theft Loss Workbook, is available to help you make a list of your stolen or damaged business or income-producing property and figure your loss.
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Comments and suggestions.(p2)

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We welcome your comments about this publication and your suggestions for future editions.
You can send us comments through IRS.gov/FormComments. Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications.
taxmap/pubs/p547-000.htm#en_us_publink100070831
Ordering forms and publications.(p2)
Visit IRS.gov/FormsPubs to download forms and publications. Otherwise, you can go to IRS.gov/OrderForms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.
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Tax questions.(p2)
If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

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Useful items

You may want to see:


Publication
 523 Selling Your Home
 525 Taxable and Nontaxable Income
 550 Investment Income and Expenses
 551 Basis of Assets
 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property)
 584-B Business Casualty, Disaster, and
Theft Loss Workbook

 976 Disaster Relief
Form (and Instructions)
 Schedule A (Form 1040): Itemized Deductions
 Form 1040NR, Schedule A: Itemized Deductions (for nonresident aliens)
 Schedule D (Form 1040): Capital Gains and Losses
 4684: Casualties and Thefts
 4797: Sales of Business Property
See How To Get Tax Help near the end of this publication for information about getting publications and forms.
taxmap/pubs/p547-000.htm#en_us_publink1000225200

Casualty(p2)

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A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.
Generally, casualty losses are deductible during the taxable year that the loss occurred. See Table 3, later.
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Deductible losses.(p2)

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Deductible casualty losses can result from a number of different causes, including the following.
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Nondeductible losses.(p2)

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A casualty loss isn't deductible if the damage or destruction is caused by the following.
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Family pet.(p3)
Loss of property due to damage by a family pet isn't deductible as a casualty loss unless the requirements discussed earlier under Casualty are met.
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Example.(p3)

Your antique oriental rug was damaged by your new puppy before it was housebroken. Because the damage wasn't unexpected and unusual, the loss isn't deductible as a casualty loss.
taxmap/pubs/p547-000.htm#en_us_publink1000225207
Progressive deterioration.(p3)
Loss of property due to progressive deterioration isn't deductible as a casualty loss. This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. The following are examples of damage due to progressive deterioration.
taxmap/pubs/p547-000.htm#en_us_publink1000251014

Special Procedure for Damage From Corrosive Drywall(p3)

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If you suffered property losses due to the effects of certain imported drywall installed in homes between 2001 and 2009, under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. For example, amounts you paid for repairs in 2017 are deductible on your 2017 tax return and amounts you paid for repairs in 2016 are deductible on your 2016 tax return.
Note.If you paid for any repairs before 2017 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U.S. Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. Form 4684 for the appropriate year can be found at IRS.gov. 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.
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Corrosive drywall.(p3)

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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. The revised identification guidance and remediation guidelines are available at www.cpsc.gov/en/Safety-Education/Safety-Education-Centers/Drywall-Information-Center/.
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Special instructions for completing Form 4684.(p3)

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If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. The IRS won't challenge your treatment of damage resulting from corrosive drywall as a casualty loss if you determine and report the loss as explained below.
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Top margin of Form 4684.(p3)
Enter "Revenue Procedure 2010-36."
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Line 1.(p3)
Enter the information required by the line 1 instructions.
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Line 2.(p3)
Skip this line.
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Line 3.(p3)
Enter the amount of insurance or other reimbursements you received (including through litigation). If none, enter -0-.
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Lines 4–7.(p3)
Skip these lines.
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Line 8.(p3)
Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. Don't enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. If you replaced a household appliance instead of repairing it, enter the lesser of:
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Line 9.(p3)
If line 8 is more than line 3, do one of the following.
  1. If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8.
  2. If item (1) doesn't apply to you, enter the full amount of the difference between lines 3 and 8.
If line 8 is less than or equal to line 3, you can't claim a casualty loss deduction using this special procedure.
EIC
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. See Reimbursement Received After Deducting Loss, later.
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Lines 10–18.(p3)
Complete these lines according to the Instructions for Form 4684.
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Choosing not to follow this special procedure.(p3)

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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. 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. Furthermore, you must have proof that shows the following.
taxmap/pubs/p547-000.htm#en_us_publink100077888

Special Provision for Damage From Deteriorating Concrete Foundation(p3)

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Under a special safe harbor provision, you can deduct the amounts you paid to repair damage to your home caused by a deteriorating concrete foundation containing the mineral pyrrhotite. Under this provision, you treat the amounts paid as a casualty loss in the year of payment. For example, amounts you paid for repairs in 2017 are deductible on your 2017 tax return and amounts you paid for repairs in 2016 are deductible on your 2016 tax return.
Note.If you paid for any repairs before 2017 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X and attaching a completed Form 4684 for the appropriate year. If you paid for any repairs after filing your original 2017 tax return and before the last day for filing a timely Form 1040X for the 2017 tax year, you may treat the amount paid as a casualty loss on a timely filed Form 1040X for the 2017 tax year. Form 4684 for the appropriate year can be found at IRS.gov. 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.
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Deteriorating concrete foundation.(p3)

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For purposes of this provision, “deteriorating concrete foundation” means a concrete foundation that is damaged because of the presence of the mineral pyrrhotite in the concrete mixture used before January 1, 2018, in pouring the foundation. See Revenue Procedure 2017-60, 2017-50 I.R.B. 559, available at IRS.gov/irb/2017-50_IRB#RP-2017-60, as modified by Revenue Procedure 2018-14, 2018-9 I.R.B. 378, available at IRS.gov/irb/2018-09_IRB#RP-2018-14, for more information.
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Applying the safe harbor provision.(p3)

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You may apply this safe harbor provision if:
Only amounts paid to restore your home to the condition existing immediately prior to the damage qualify for loss treatment. Amounts paid for improvements or additions that increase the value of your home above its pre-loss value aren't allowed as a casualty loss.
You must report the amount of the loss on Form 4684 and must mark “Revenue Procedure 2017-60” at the top of that form. The IRS won't challenge your treatment of damage resulting from a deteriorating concrete foundation as a casualty loss if the loss is determined and reported as provided in Revenue Procedure 2017-60. However, these losses will be subject to the $100 Rule and the 10% Rule, discussed later.
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Claims for reimbursement.(p4)
If you have a pending claim for reimbursement, or you intend to pursue reimbursement, you may claim a loss for 75% of the unreimbursed amounts paid during the taxable year to repair damage to your personal residence caused by the deteriorating concrete foundation. If you have been fully reimbursed before filing a return for the year the loss was sustained you may not claim a loss.
If you don’t have a pending claim for reimbursement, and you don’t intend to pursue reimbursement, you may claim as a loss all unreimbursed amounts (subject to the adjusted basis limitation) paid during the taxable year to repair damage to your home caused by the deteriorating concrete foundation.
EIC
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. See Reimbursement Received After Deducting Loss, later.