Publication 547 - Casualties,disasters,and Thefts

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National Center for Missing and Exploited Chil-

We respond to many letters by telephone.

Terrorist attacks.

dren. Photographs of missing children selected

Therefore, it would be helpful if you would in-

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Vandalism.

by the Center may appear in this publication on

clude your daytime phone number, including the

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pages that would otherwise be blank. You can

area code, in your correspondence.

Volcanic eruptions.

help bring these children home by looking at the

photographs and calling 1 – 800 – THE – LOST

Useful Items

Nondeductible losses. A casualty loss is not

(1 – 800 – 843 – 5678) if you recognize a child.

You may want to see:

deductible if the damage or destruction is

caused by the following.

Publication

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Accidentally breaking articles such as

523

Selling Your Home

Introduction

glassware or china under normal condi-

525

Taxable and Nontaxable Income

tions.

This publication explains the tax treatment of

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550

Investment Income and Expenses

A family pet.

casualties, thefts, and losses on deposits. A

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casualty occurs when your property is dam-

551

Basis of Assets

A fire if you willfully set it, or pay someone

aged as a result of a disaster such as a storm,

else to set it.

584

Casualty, Disaster, and Theft Loss

fire, car accident, or similar event. A theft occurs

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Workbook (Personal-Use Property)

A car accident if your willful negligence or

when someone steals your property. A loss on

willful act caused it. The same is true if the

deposits occurs when your financial institution

584B Business Casualty, Disaster, and

willful act or willful negligence of someone

becomes insolvent or bankrupt.

Theft Loss Workbook

acting for you caused the accident.

This publication discusses the following top-

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ics.

Form (and Instructions)

Progressive deterioration (explained next).

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Schedule A (Form 1040) Itemized

Definitions of a casualty, theft, and loss on

Progressive deterioration. Loss of prop-

Deductions

deposits.

erty due to progressive deterioration is not de-

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Schedule D (Form 1040) Capital Gains

How to figure the amount of your gain or

ductible as a casualty loss. This is because the

and Losses

loss.

damage results from a steadily operating cause

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or a normal process, rather than from a sudden

4684 Casualties and Thefts

How to treat insurance and other reim-

event. The following are examples of damage

bursements you receive.

4797 Sales of Business Property

due to progressive deterioration.

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The deduction limits.

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See How To Get Tax Help near the end of

The steady weakening of a building due to

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this publication for information about getting

When and how to report a casualty or

normal wind and weather conditions.

publications and forms.

theft.

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The deterioration and damage to a water

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The special rules for disaster area losses.

heater that bursts. However, the rust and

water damage to rugs and drapes caused

Casualty

by the bursting of a water heater does

Forms to file. When you have a casualty or

qualify as a casualty.

theft, you have to file Form 4684. You will also

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have to file one or more of the following forms.

A casualty is the damage, destruction, or loss of

Most losses of property caused by

property resulting from an identifiable event that

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droughts. To be deductible, a drought-re-

Schedule A (Form 1040).

is sudden, unexpected, or unusual.

lated loss generally must be incurred in a

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Schedule D (Form 1040).

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trade or business or in a transaction en-

A sudden event is one that is swift, not

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tered into for profit.

Form 4797.

gradual or progressive.

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Termite or moth damage.

For details on which form to use, see How To

An unexpected event is one that is ordi-

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Report Gains and Losses, later.

narily unanticipated and unintended.

The damage or destruction of trees,

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shrubs, or other plants by a fungus, dis-

An unusual event is one that is not a

Condemnations. For information on condem-

ease, insects, worms, or similar pests.

day-to-day occurrence and that is not typi-

nations of property, see Involuntary Conver-

However, a sudden destruction due to an

cal of the activity in which you were en-

sions in chapter 1 of Publication 544.

unexpected or unusual infestation of beet-

gaged.

les or other insects may result in a casu-

Workbooks for casualties and thefts. Publi-

alty loss.

cation 584 is available to help you make a list of

Deductible losses. Deductible casualty

your stolen or damaged personal-use property

losses can result from a number of different

and figure your loss. It includes schedules to

causes, including the following.

help you figure the loss on your home and its

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Car accidents (but see Nondeductible

Theft

contents, and your motor vehicles.

losses, next, for exceptions).

Publication 584B is available to help you

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Earthquakes.

make a list of your stolen or damaged business

A theft is the taking and removing of money or

or income-producing property and figure your

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property with the intent to deprive the owner of it.

Fires (but see Nondeductible losses, next,

loss.

The taking of property must be illegal under the

for exceptions).

law of the state where it occurred and it must

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Comments and suggestions. We welcome

Floods.

have been done with criminal intent.

your comments about this publication and your

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Theft includes the taking of money or prop-

Government-ordered demolition or reloca-

suggestions for future editions.

erty by the following means.

tion of a home that is unsafe to use be-

You can e-mail us while visiting our web site

cause of a disaster as discussed under

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Blackmail.

Disaster Area Losses, later.

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You can write to us at the following address:

Burglary.

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Mine cave-ins.

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Embezzlement.

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Internal Revenue Service

Shipwrecks.

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Tax Forms and Publications

Extortion.

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Sonic booms.

W:CAR:MP:FP

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Kidnapping for ransom.

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1111 Constitution Ave. NW

Storms, including hurricanes and torna-

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Washington, DC 20224

does.

Larceny.

Page 2

Publication 547 - Casualties,disasters,and Thefts - 2002 Page 2

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