Casualty Loss Deduction

Definition

Section 165 generally allows an itemized deduction for casualty and theft losses on personal-use property, but TCJA limited the personal-use deduction to losses in federally declared disaster areas for 2018 through 2025.

Examples

• A homeowner in a federally declared disaster area with uninsured hurricane damage may deduct the loss subject to the 10-percent-of-AGI floor.